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Earthquakes and Price Discovery in the Housing Market: Evidence from New Zealand

Author

Listed:
  • Michael LaCour-Little

    (California State University - Fullerton)

  • Arsenio Staer

    (California State University - Fullerton)

Abstract

This paper uses hedonic regression to examine prices in the Christchurch housing market before, and after, the recent severe earthquakes. Prices were relatively stable prior to the earthquakes but increased rapidly thereafter, consistent with the contraction of supply and increased demand from displaced households and a net influx of workers involved in the rebuilding effort. In addition, we find that the use of auctions increased after the earthquakes and that auctioned properties command significantly higher prices as compared to other sales methods, helping to explain the increased interest in this form of price discovery. Results are robust after correcting for potential sample selection bias.

Suggested Citation

  • Michael LaCour-Little & Arsenio Staer, 2016. "Earthquakes and Price Discovery in the Housing Market: Evidence from New Zealand," International Real Estate Review, Global Social Science Institute, vol. 19(4), pages 493-513.
    • Handle: RePEc:ire:issued:v:19:n:04:2016:p:493-513
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    References listed on IDEAS

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    Cited by:

    1. Huang, Yi, 2021. "Salience of hazard disclosure and house prices: Evidence from Christchurch, New Zealand," Regional Science and Urban Economics, Elsevier, vol. 88(C).

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    More about this item

    Keywords

    Housing Prices; Earthquakes; Auctions; Hedonic Regression;
    All these keywords.

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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