Modeling of Speculation in the Housing Market of Tehran

Document Type : Original Article

Authors

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

Abstract

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.

Keywords

References

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