Modeling of Speculation in the Housing Market of Tehran

Document Type : Original Article


1 Associate Professor of Economics, Faculty of Economics and Social Sciences, Bu-Ali Sina University, Hamedan, Iran

2 Ph.D. Candidate in Economics, Faculty of Economics and Social Sciences, Bu-Ali Sina University, Hamedan, Iran


Speculation in the housing market is one of the main causes of fluctuations and shocks in the housing market that have destructive effects on the macroeconomic variables. In this study, the spatial pattern of speculation in the housing market of 22 districts of Tehran has been investigated. The research period was 2001 to 2019 and Nonlinear Least Squares method was used to estimate the model. The results indicate that the motivation for speculation is the result of price expectations and price trend analysis of previous periods, which was reflected in the form of speculation demand in the market and have a significant impact on fluctuations in the housing market. Also, due to the low elasticity of housing supply, it can be concluded that increasing the speed of production and strengthening the supply side, can be a key factor in controlling market fluctuations by responding to the demand for speculation. The results show that the intensity of speculation in areas 1, 2, 3, 5 and 22 of Tehran is higher than other areas and by moving from north to south of Tehran, the intensity of speculation has decreased. According to the results, the speculation in region 1 of Tehran started before 2001 in the housing market and for other regions, the time of speculation started after 2001.


- Agarwal, S., Chau, K.W., Hu, M., & Wan, W.X. (2020). Tax Policy, Housing Speculation, and Property Market Dynamics. Available at SSRN:
- Aram, A., Aram, S., & Ghanbari, A. (2011), Investigation of short-term and long-term effects of factors affecting the housing price bubble in Iran, using ECM and ARDL methods. The first conference on Iran's urban economy, CIVILICA (In Persian).
- Barkham, R. J., & Geltner, D. M. (1996). Price discovery and efficiency in the UK housing market. Journal of Housing Economics, 5(1), 41-63.
- Barlevy, G., & Fisher, J. D. (2010). Mortgage choices and housing speculation. Chicago: Federal Reserve Bank of Chicago, No. WP-2010-12.
- Baseri, B, Kiani, G & Malekipour, M, (2021), The attractiveness of housing as a financial asset against inflation and its impact on housing demand in Iran. Financial Economics, 15(2), 52-69 (In Persian).
- Bhattacharyya, Debjani, (2020), Speculation, Comparative Studies of South Asia. Africa and the Middle East, 40 (1), 51–56.
- Chen, M. C., Tsai, I. C., & Chang, C. O. (2007). House prices and household income: Do they move apart? Evidence from Taiwan. Habitat International, 31(2), 243-256.
- Chen, Z., & Wang, C. (2021). Effects of intervention policies on speculation in housing market: Evidence from China. Journal of Management Science and Engineering, 12(3), 1-10.
- Chung, H. S., & J. H. Kim. (2004). Housing Speculation and Housing Price Bubble in Korea. KDI School of Public Policy and Management Paper No. 04-06.
- Dieci, R., & Westerhoff, F. (2012). A simple model of a speculative housing market. Journal of Evolutionary Economics, 22(2), 303-329.
- Gao, Z., Sockin, M., & Xiong, W. (2020). Economic consequences of housing speculation. The Review of Financial Studies, 33(11), 5248-5287.
- Gemeda, B. S., Abebe, B. G., & Cirella, G. T. (2020). How efficient is urban land speculation? In Sustainable Human–Nature Relations (pp. 101-121). Springer, Singapore.
- Goodarzi, H.S., & Armanmehr, M.R. (2018). Market analysis and forecasting of housing prices in Tehran. Journal of Iranian Economic Issues, 5(2), 79-103.
- Gholizadeh, Ali Akbar, (2009), Housing price bubble and the mechanism of the impact of monetary policy on the housing sector in urban areas of Iran. Office of Housing Planning and Economics, Ministry of Housing and Urban Development (In Persian).
- Gholizadeh, A.A. (2008). Theory of housing prices in Iran (in simple language). Tehran, Noor Alam Publications, first edition, (In Persian).
- Gholizadeh, A. A. & Norouzi Nejad, M. (2019). Housing Price Dynamics and Economic Fluctuations in Iran with Stochastic Dynamic General Equilibrium Approach (DSGE). Economic Modeling Research, 9(36), 37-74 (In Persian).
- Gholizadeh, A.A. & Nikbakht, E. (2010). The study of the relationship between the stock market and business cycles in the Iranian housing market (1370-1386). Master Thesis, Bu Ali Sina University (In Persian).
- Khalili Iraqi, S.M., Mehrara, M. & Azimi, S. R. (2012). A Study of Factors Affecting Housing Prices in Iran Using Combined Data. Research and Economic Policies, 20(63), 50-33 (In Persian).
- Khodadadkashi, F. & Razban, N. (2014). The Role of Speculation on Housing Price Changes in Iran (1991-2008). Economic Research and Policies, 22(71), 5- 28 (In Persian).
- Lalehpour, M. (2020). An Analysis of Urban Land Policies and Laws with Emphasis on the Anti-Trafficking Approach in the Urban Land Market; Case Study: Tehran Metropolis. Environmental Management, 12(47), 183-206 (In Persian).
- Lin, Z., & Vandell, K.D. (2001). Asset allocation with liquid and illiquid markets. University of Wisconsin. Center for Land Economics Research Working Paper.
- Malpezzi, S., & Wachter, S. (2005). The role of speculation in real estate cycles. Journal of Real Estate Literature, 13(2), 141-164.
- Milala, S. I., Manga, S. H., Dala, B. M., & Habibu, A. M. (2021). Effect of Land Speculation on Real Estate Development in Gombe Metropolis of Nigeria. Scopia International Journal for Science, Commerce & Arts, 1(3), 28-46.
- Mousavi, M.H., & Droudian, H. (2015). Analysis of Factors Affecting Housing Prices in Tehran. Economic Modeling, 9(31), 103-127 (In Persian).
- Nademi, Y. & Khochiani, R. (2017). Investigating the Relationship between the Housing Sector and Some Macroeconomic Variables in Iran: Wavelet Coherence Approach. Quarterly Journal of Econometric Modeling, 2(4), 85-106 (In Persian).
- Park, D., & Xiao, Q. (2010). Housing Prices and the Role of Speculation: The Case of Seoul. Empirical Economics, 38(3), 102-122.
- Pornchokchai, S., & Perera, R. (2005). Housing speculation in Bangkok: lessons for emerging economies. Habitat International, 29(3), 439-452.
- Roehner, B.M. (2002). Patterns of speculation: a study in observational econophysics. Cambridge University Press.
- Romslo, P., & Bragnes, O. (2019). Does mortgage regulation affect speculation in the housing market? Master's thesis, Handelshøyskolen BI.
- Seyed Noorani, S.M. (2014). A Study of Speculation and Housing Price Bubbles in Urban Areas of Iran. Economic Research Journal, 14(52), 49-68 (In Persian).
- Shi, S., Rahman, A., & Wang, B.Z. (2020). Australian Housing Market Booms: Fundamentals or Speculation? Economic Record, 96(315), 381-401.
- Shiller, R. (2007). Understanding recent trends in house prices and home ownership. Cowles Foundation Discussion Paper No. 1630. Yale University, New Haven.
- Swedberg, R. (2021). Does speculation belong in social science research? Sociological Methods & Research, 50(1), 45-74.
- Wong, W.L., Lee, C., Law, S.H. & Said, R. (2015). Consumption and housing wealth: a Malaysian case that demonstrates a negative relationship. International Journal of Economics and Management, 9(S), 163-180.
- Yang, Y., & Rehm, M. (2021). Housing prices and speculation dynamics: a study of Auckland housing market. Journal of Property Research, 38(4), 286-304.