en
Report
Open access
English

House Prices and Bubbles in New Zealand

Collection
  • Cahiers de recherche; 2007.05
Publication date2007
Abstract

This paper studies actual (real) house prices relative to fundamental (real) house values in New Zealand for the period 1970-2005. Utilizing a dynamic present value model, we find disparities between actual and fundamental house prices in the early 1970s and 1980s and from 2000 to date. We model the bubble component that is related to fundamentals (the intrinsic component), making it possible to highlight whether a bubble still exists after that component is accounted for. We then analyze any remaining bubble to detect any momentum behavior. Much of the overvaluation of the housing market is found to be due to price dynamics rather than an overreaction to fundamentals.

Keywords
  • Real house prices
  • Real disposable income
  • Fundamentals
  • Present value
  • Time-varying risk
  • Bubbles
Citation (ISO format)
FRASER, P., HOESLI, Martin E., MCALEVEY, L. House Prices and Bubbles in New Zealand. 2007
Main files (1)
Report
accessLevelPublic
Identifiers
  • PID : unige:5735
555views
1636downloads

Technical informations

Creation04/15/2010 12:19:36 PM
First validation04/15/2010 12:19:36 PM
Update time03/14/2023 3:26:22 PM
Status update03/14/2023 3:26:22 PM
Last indexation01/15/2024 7:42:32 PM
All rights reserved by Archive ouverte UNIGE and the University of GenevaunigeBlack