Market sentiment in private housing market

Chi Man Hui, Ziyou Wang

Research output: Journal article publicationJournal articleAcademic researchpeer-review

19 Citations (Scopus)

Abstract

Housing demands are partially driven by participant's sentiment, but the literature on housing economics rarely acknowledges that fact. This paper aims to investigate the role of market sentiment in housing market. A sentiment index is developed to capture the aggregate investor behavior and thus market scenario. In empirical application, using elaborate transaction records during 1991-2011 (more than two million registrations) in Hong Kong, the sentiment index is established. Generally, investors in housing market are more likely to be sentiment-influenced. In trading process, a delaying effect on the expected waiting time (duration) from buy to sell is found. Furthermore, market sentiment quantified by sentiment index is an efficient predictor of price level, return rate of price and trading volume. Meanwhile, sentiment remarks the significant role in long-run development of housing market. The approach and implications of this study may serve as a reference for the relevant authorities to stabilize and improve the environment of housing market.
Original languageEnglish
Pages (from-to)375-385
Number of pages11
JournalHabitat International
Volume44
DOIs
Publication statusPublished - 1 Oct 2014

Keywords

  • Housing demand
  • Market sentiment
  • Private housing market
  • Sentiment index

ASJC Scopus subject areas

  • Nature and Landscape Conservation

Cite this