Price and Volume Relationship under Housing Presale System
||Peng, Chien-Wen; Tsai, I-Chun; Wu, Wey-Wen
||Price and Volume Relationship under Housing Presale System
||18th Annual European Real Estate Society Conference in Eindhoven, the Netherlands
||This paper investigates the causality relationship between sale price and trading volume under housing presale system by using the data of existing house price, presale house price, trading volume, and the number of new construction from 1993Q1 to 2010Q4 in four spatial housing submarkets, Taipei city, New Taipei City, Taichung city, and Kaohsiung City in Taiwan. The empirical results reveal several interesting findings. First, the direction of causality is from house price (especially for existing house price) to trading volume for most cities, which is quite different from the previoust studies. Second, house prices Granger cause the number of new construction in Taipei City and Taichung City. However, the number of new construction does not Granger cause house prices. Third, trading volume does not Granger cause the number of new construction, but the number of new construction weakly Granger cause trading volume in most cities, except in Taipei City. Fourth, existing house prices Granger cause presale house price in most cities, especially in Taipei City and New Taipei city. Furthermore, existing house prices of Taipei City Granger cause existing house prices of other cities. However, presale house price of Taipei City only weakly Granger cause presale house price of New Taipei City and Taichung City. We also find that the price-volume relationships will be a little different in upturn and downturn of real estate cycles across cities.
||Price-volume relationship, presale system, submarkets, real estate cycles, Granger Causality
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||E5: Housing Market (II)
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