IDEAS home Printed from https://ideas.repec.org/p/nbp/nbpmis/143.html

Modelling of cycles in the residential real estate market – interactions between the primary and the secondary market and multiplier effects

Author

Abstract

While analysing the housing market, we focus on the short-term modelling of the housing units market instead of analysing the long-term housing space market. In this context, even a minor change in factors affecting the real estate market leads, due to the multiplier effect, to strong shocks on the demand side, and, consequently, to an excessive reaction of the supply side. These shocks, depending on the price elasticity of supply and demand, may disappear or explode. This articles presents the modelling of cycles in the residential real estate market. We focus on price changes and the number of housing units in the primary and secondary market. We find that in order to smooth the housing cycle, the housing demand needs to be smoothed. This can be achieved with the use of fiscal policy, prudential regulations and housing policy.

Suggested Citation

  • Hanna Augustyniak & Laszek Jacek & Krzysztof Olszewski & Joanna Waszczuk, 2013. "Modelling of cycles in the residential real estate market – interactions between the primary and the secondary market and multiplier effects," NBP Working Papers 143, Narodowy Bank Polski.
    • Handle: RePEc:nbp:nbpmis:143
    as

    Download full text from publisher

    File URL: https://static.nbp.pl/publikacje/materialy-i-studia/143_en.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. William C. Wheaton, 1999. "Real Estate “Cycles”: Some Fundamentals," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 27(2), pages 209-230, June.
    2. Raymond Tse & C. W. Ho & S. Ganesan, 1999. "Matching housing supply and demand: an empirical study of Hong Kong's market," Construction Management and Economics, Taylor & Francis Journals, vol. 17(5), pages 625-633.
    3. Westaway, Peter, 1992. "A simulation model of consumer spending and housing demand," National Institute of Economic and Social Research (NIESR) Discussion Papers 15, National Institute of Economic and Social Research.
    4. Topel, Robert H & Rosen, Sherwin, 1988. "Housing Investment in the United States," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 718-740, August.
    5. Matt Waldron & Fabrizio Zampolli, 2010. "Household debt, house prices and consumption in the United Kingdom: a quantitative theoretical analysis," Bank of England working papers 379, Bank of England.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Krzysztof Olszewski & Robert Leszczyński, 2013. "Panel analysis of home prices in the primary and secondary market in 17 largest cities in Poland," Chapters from NBP Conference Publications, in: Hanna Augustyniak & Jacek Łaszek & Krzysztof Olszewski (ed.), Papers presented during the Narodowy Bank Polski Workshop: Recent trends in the real estate market and its analysis, 2013, chapter 12, pages 39-71, Narodowy Bank Polski.
    2. Brzezicka, Justyna & Łaszek, Jacek & Olszewski, Krzysztof & Waszczuk, Joanna, 2019. "Analysis of the filtering process and the ripple effect on the primary and secondary housing market in Warsaw, Poland," Land Use Policy, Elsevier, vol. 88(C).
    3. Hanna Augustyniak & Jacek Łaszek & Krzysztof Olszewski & Joanna Waszczuk, 2013. "Housing market cycles – a disequilibrium model and its application to the primary housing market in Warsaw," Chapters from NBP Conference Publications, in: Hanna Augustyniak & Jacek Łaszek & Krzysztof Olszewski (ed.), Papers presented during the Narodowy Bank Polski Workshop: Recent trends in the real estate market and its analysis, 2013, chapter 11, pages 5-38, Narodowy Bank Polski.
    4. Coskun Yener & Jadevicius Arvydas, 2017. "Is there a Housing Bubble in Turkey?," Real Estate Management and Valuation, Sciendo, vol. 25(1), pages 48-73, March.
    5. Łaszek, Jacek & Olszewski, Krzysztof, 2014. "The behaviour of housing developers and aggregate housing supply," MPRA Paper 60478, University Library of Munich, Germany.
    6. Hanna Augustyniak & Jacek Łaszek & Krzysztof Olszewski & Joanna Waszczuk, 2013. "To Rent or to Buy – Analysis of Housing Tenure Choice Determined by Housing Policy," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 33.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hanna Augustyniak & Jacek Łaszek & Krzysztof Olszewski & Joanna Waszczuk, 2013. "Housing market cycles – a disequilibrium model and its application to the primary housing market in Warsaw," Chapters from NBP Conference Publications, in: Hanna Augustyniak & Jacek Łaszek & Krzysztof Olszewski (ed.), Papers presented during the Narodowy Bank Polski Workshop: Recent trends in the real estate market and its analysis, 2013, chapter 11, pages 5-38, Narodowy Bank Polski.
    2. Łaszek, Jacek & Olszewski, Krzysztof, 2014. "The behaviour of housing developers and aggregate housing supply," MPRA Paper 60478, University Library of Munich, Germany.
    3. Paciorek, Andrew, 2013. "Supply constraints and housing market dynamics," Journal of Urban Economics, Elsevier, vol. 77(C), pages 11-26.
    4. Robert Edelstein & Desmond Tsang, 2007. "Dynamic Residential Housing Cycles Analysis," The Journal of Real Estate Finance and Economics, Springer, vol. 35(3), pages 295-313, October.
    5. William Tayler & Konstantinos Vasilopoulos, 2021. "Real Estate and Construction Sector Dynamics Over the Business Cycle," Working Papers 326919291, Lancaster University Management School, Economics Department.
    6. Paulo M.M. Rodrigues & Rita Fradique Lourenço, 2015. "House prices: bubbles, exuberance or something else? Evidence from euro area countries," Working Papers w201517, Banco de Portugal, Economics and Research Department.
    7. Schünemann, Johannes & Trimborn, Timo, 2023. "Boosting taxes for boasting about houses? Status concerns in the housing market," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 120-143.
    8. Lozano, Francisco Javier, 2025. "Índice de precios de viviendas nuevas en Santiago basado en la metodología de ventas repetidas [New housing price index in Santiago based on the repeat-sales methodology]," MPRA Paper 127115, University Library of Munich, Germany.
    9. Edward L. Glaeser & Joseph Gyourko, 2006. "Housing Dynamics," NBER Working Papers 12787, National Bureau of Economic Research, Inc.
    10. Oliver W. Lerbs, 2014. "House prices, housing development costs, and the supply of new single-family housing in German counties and cities," Journal of Property Research, Taylor & Francis Journals, vol. 31(3), pages 183-210, September.
    11. McCartney, John, 2008. "An Empirical Analysis of Development Cycles in the Dublin Office Market 1976-2007," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2008(4-Winter), pages 68-92.
    12. Pat Wilson & John Okunev & Guy Ta, 1994. "Are Real Estate and Securities Markets Integrated? Some Australian Evidence," Working Paper Series 42, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
    13. Richard K. Green & Patric Hendershott, 1992. "Demographic Factors and Real House Prices," Wisconsin-Madison CULER working papers 92-08, University of Wisconsin Center for Urban Land Economic Research.
    14. Fullerton, Jr., Thomas M. & Taylor West, Carol A., 1998. "Regional Econometric Housing Start Forecast Accuracy in Florida," The Review of Regional Studies, Southern Regional Science Association, vol. 28(3), pages 15-42, Winter.
    15. Addison-Smyth, Diarmaid & McQuinn, Kieran & O' Reilly, Gerard, 2008. "Estimating the Structural Demand for Irish Housing," Research Technical Papers 1/RT/08, Central Bank of Ireland.
    16. Rangan Gupta & Alain Kabundi & Stephen M. Miller, 2009. "Using Large Data Sets to Forecast Housing Prices: A Case Study of Twenty US States," Working Papers 200912, University of Pretoria, Department of Economics.
    17. Lawrence J. Christiano & Joshua M. Davis, 2006. "Two flaws in business cycle dating," Working Papers (Old Series) 0612, Federal Reserve Bank of Cleveland.
    18. Morris A. Davis, 2010. "housing and the business cycle," The New Palgrave Dictionary of Economics,, Palgrave Macmillan.
    19. Lastrapes, William D. & Potts, Todd B., 2006. "Durable goods and the forward-looking theory of consumption: Estimates implied by the dynamic effects of money," Journal of Economic Dynamics and Control, Elsevier, vol. 30(8), pages 1409-1430, August.
    20. Kang, Wensheng, 2011. "Housing price dynamics and convergence in high-tech metropolitan economies," The Quarterly Review of Economics and Finance, Elsevier, vol. 51(3), pages 283-291, June.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:nbp:nbpmis:143. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Jakub Growiec (email available below). General contact details of provider: https://edirc.repec.org/data/nbpgvpl.html .

    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.