IDEAS home Printed from https://ideas.repec.org/a/jre/issued/v34n32012p345-374.html
   My bibliography  Save this article

Investment Demand and Housing Prices in an Emerging Economy

Author

Listed:
  • Ming-Chi Chen

    (National Sun Yat-sen University)

  • Chin-Oh Chang

    (National Chengchi University)

  • Chih-Yuan Yang

    (National Tsing Hua University)

  • Bor-Ming Hsieh

    (Chang Jung Christian University)

Abstract

This paper hypothesizes that the increase in money supply induced by rapid economic growth leads to strong investment demand in the Taiwanese housing market. A threshold model is used to confirm money supply as the key threshold variable. When the growth rate of money supply is below the model's estimated threshold value, household number, income, and user cost of housing capital are significant variables. It appears that service demand and housing supply are essential in creating the linear movement of housing prices. However, when the growth rate of money supply exceeds the threshold value, stock prices and the inflation rate become important. These findings suggest that non-linear movement of housing prices is primarily driven by investment demand.

Suggested Citation

  • Ming-Chi Chen & Chin-Oh Chang & Chih-Yuan Yang & Bor-Ming Hsieh, 2012. "Investment Demand and Housing Prices in an Emerging Economy," Journal of Real Estate Research, American Real Estate Society, vol. 34(3), pages 345-374.
    • Handle: RePEc:jre:issued:v:34:n:3:2012:p:345-374
    as

    Download full text from publisher

    File URL: http://pages.jh.edu/jrer/papers/pdf/past/vol34n03/04.345_374.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zeng, Jhih-Hong & Peng, Chi-Lu & Chen, Ming-Chi & Lee, Chien-Chiang, 2013. "Wealth effects on the housing markets: Do market liquidity and market states matter?," Economic Modelling, Elsevier, vol. 32(C), pages 488-495.
    2. Chun-Kei Tsang & Wing-Keung Wong & Ira Horowitz, 2016. "Arbitrage opportunities, efficiency, and the role of risk preferences in the Hong Kong property market," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 33(4), pages 735-754, October.
    3. Kurmaş Akdoğan, 2019. "Size and sign asymmetries in house price adjustments," Applied Economics, Taylor & Francis Journals, vol. 51(48), pages 5268-5281, October.
    4. Jiangtao Li & Jianyue Ji & Huiwen Guo & Lei Chen, 2018. "Research on the Influence of Real Estate Development on Private Investment: A Case Study of China," Sustainability, MDPI, vol. 10(8), pages 1-17, July.
    5. Hsiao-Jung Teng & Chin-Oh Chang & Ming-Chi Chen, 2017. "Housing bubble contagion from city centre to suburbs," Urban Studies, Urban Studies Journal Limited, vol. 54(6), pages 1463-1481, May.
    6. Lewis Vincent & Bruce Morley, 2014. "Assymetric Adjustment and Intervention in the UK Housing Market," Department of Economics Working Papers 29/14, University of Bath, Department of Economics.
    7. Su Han Chan & Ko Wang & Jing Yang, 2011. "A Rational Explanation for Boom-and-Bust Price Patterns in Real Estate Markets," International Real Estate Review, Global Social Science Institute, vol. 14(3), pages 257-282.
    8. Tsai, I-Chun, 2013. "The asymmetric impacts of monetary policy on housing prices: A viewpoint of housing price rigidity," Economic Modelling, Elsevier, vol. 31(C), pages 405-413.

    More about this item

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:34:n:3:2012:p:345-374. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: JRER Graduate Assistant/Webmaster (email available below). General contact details of provider: http://www.aresnet.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.