TY - GEN
T1 - Analysis of dynamical impacts of interest rate on expected housing price
AU - Leung, Andrew Y.T.
AU - Xu, Jiana
AU - Ge, Janet X.
PY - 2005
Y1 - 2005
N2 - The first interest rate hike in China during the last decade aiming to cool the seemly overheated real estate market arouses debate on whether financial policy is indeed effective for housing price adjustment. Different real estate markets have different scenarios during a sudden change (shock) of interest rate. A cobweb model is built to analyze the after-shock oscillations. Consideration includes the heterogeneous expectations of agents, supply lag and deprecation rate. In particular, user cost demand model and stock-flow supply model are used. The results show that the dynamics of the expected housing price varies substantially with these factors. Financial policies should be chosen carefully in consistence with each unique real estate market, since some portfolio parameters can increase or suppress the price oscillations.
AB - The first interest rate hike in China during the last decade aiming to cool the seemly overheated real estate market arouses debate on whether financial policy is indeed effective for housing price adjustment. Different real estate markets have different scenarios during a sudden change (shock) of interest rate. A cobweb model is built to analyze the after-shock oscillations. Consideration includes the heterogeneous expectations of agents, supply lag and deprecation rate. In particular, user cost demand model and stock-flow supply model are used. The results show that the dynamics of the expected housing price varies substantially with these factors. Financial policies should be chosen carefully in consistence with each unique real estate market, since some portfolio parameters can increase or suppress the price oscillations.
KW - Cobweb model
KW - Expected housing price oscillations
KW - Heterogeneous expectations
UR - https://www.scopus.com/pages/publications/84861022017
UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-84861022017&origin=recordpage
M3 - RGC 32 - Refereed conference paper (with host publication)
SN - 0902896938
SN - 9780902896932
VL - 2
SP - 645
EP - 654
BT - Association of Researchers in Construction Management, ARCOM 2005 - Proceedings of the 21st Annual Conference
T2 - 21st Annual Conference on Association of Researchers in Construction Management, ARCOM 2005
Y2 - 7 September 2005 through 9 September 2005
ER -