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Effect of Money Supply, Population, and Rent on Real Estate: A Clustering Analysis in Taiwan

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  • Cheng-Hong Yang

    (Department of Electronic Engineering, National Kaohsiung University of Science and Technology, Kaohsiung 80778, Taiwan
    Ph. D. Program in Biomedical Engineering, Kaohsiung Medical University, Kaohsiung 80708, Taiwan
    School of Dentistry, Kaohsiung Medical University, Kaohsiung 80708, Taiwan
    Drug Development and Value Creation Research Center, Kaohsiung Medical University, Kaohsiung 80708, Taiwan)

  • Borcy Lee

    (Department of Electronic Engineering, National Kaohsiung University of Science and Technology, Kaohsiung 80778, Taiwan)

  • Yu-Da Lin

    (Department of Computer Science and Information Engineering, National Penghu University of Science and Technology, Magong City 880011, Taiwan)

Abstract

Real estate is a complex and unpredictable industry because of the many factors that influence it, and conducting a thorough analysis of these factors is challenging. This study explores why house prices have continued to increase over the last 10 years in Taiwan. A clustering analysis based on a double-bottom map particle swarm optimization algorithm was applied to cluster real estate–related data collected from public websites. We report key findings from the clustering results and identify three essential variables that could affect trends in real estate prices: money supply, population, and rent. Mortgages are issued more frequently as additional real estate is created, increasing the money supply. The relationship between real estate and money supply can provide the government with baseline data for managing the real estate market and avoiding unlimited growth. The government can use sociodemographic data to predict population trends to in turn prevent real estate bubbles and maintain a steady economic growth. Renting and using social housing is common among the younger generation in Taiwan. The results of this study could, therefore, assist the government in managing the relationship between the rental and real estate markets.

Suggested Citation

  • Cheng-Hong Yang & Borcy Lee & Yu-Da Lin, 2022. "Effect of Money Supply, Population, and Rent on Real Estate: A Clustering Analysis in Taiwan," Mathematics, MDPI, vol. 10(7), pages 1-17, April.
    • Handle: RePEc:gam:jmathe:v:10:y:2022:i:7:p:1155-:d:786313
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    1. Paoyu Huang & Chih-Te Yang & Yuhsin Chen & Yensen Ni, 2023. "A New Look on the Profitability of Fixed and Indexed Mortgage Products," Mathematics, MDPI, vol. 11(17), pages 1-16, August.
    2. Hang-Yuan Du & Wen-Jian Wang, 2022. "A Clustering Ensemble Framework with Integration of Data Characteristics and Structure Information: A Graph Neural Networks Approach," Mathematics, MDPI, vol. 10(11), pages 1-23, May.

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