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Bubbling Away: Forecasting Real Estate Prices, Rents, and Bubbles in a Transition Economy

Author

Listed:
  • Galina An

    (Kenyon College)

  • Charles Becker

    (Duke University)

  • Enoch Cheng

    (University of Colorado)

Abstract

Real housing prices have both surged and swooned in formerly socialist countries. We use 2000–2017 aggregate housing sales and rental price data from Kazakhstan to explore price movements during boom and stagnation eras, investigating the rent–price ratio’s (RPR) capacity to predict housing returns and rent growth for an emerging post-Soviet economy. RPR predicts returns better during periods of price increases than declines, and its importance in predicting the bubble component diminishes with time. Short-run RPR changes are consistent with rational bubble behavior during the period of secular upswing but different predictive variables matter during price increases and declines.

Suggested Citation

  • Galina An & Charles Becker & Enoch Cheng, 2021. "Bubbling Away: Forecasting Real Estate Prices, Rents, and Bubbles in a Transition Economy," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 63(2), pages 263-317, June.
    • Handle: RePEc:pal:compes:v:63:y:2021:i:2:d:10.1057_s41294-020-00138-9
    DOI: 10.1057/s41294-020-00138-9
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    More about this item

    Keywords

    Rent–price ratio; Bubbles; Transition economies; Kazakhstan;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • P30 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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