Open AccessInternational Real Estate Review
Author(s) -
Su Han Chan,
Ко Wang,
Jing Yang
Publication year - 2011
Publication title -
journal of the asian real estate society
Language(s) - English
Resource type - Journals
ISSN - 1029-6131
DOI - 10.53383/100142
Subject(s) - stylized fact , bust , boom , real estate , economics , china , movement (music) , macroeconomics , monetary economics , economy , finance , geography , geology , philosophy , oceanography , archaeology , aesthetics
This paper develops a stylized model to provide a rational explanation for the boom-and-bust price movement pattern that we frequently observe in the real world. Our stylized model indicates that there are three conditions to form a boom-and- bust price pattern in a community: a move-in of high income residents, wide income gap between new and existing residents, and supply process that leads to an inventory buildup. It seems that, based on these three conditions, China is more likely to experience a boom-and-bust price movement pattern than a developed country with a more mature and less vibrant economy.