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Title: Unveiling the mystery of “empty” buildings : a quantitative study of housing vacancy rates
Authors: Goh, May Hui
Lim, Xin Hui
Toh, Eu Hao
Keywords: DRNTU::Social sciences::Economic theory
Issue Date: 2015
Abstract: The theoretical relationship between housing price and housing vacancy rates is ambiguous. What causes housing vacancy rate to change? How does housing vacancy rate impact the housing prices? To address these questions, we develop a mathematical framework with solid micro foundation to study the determinants of housing vacancy rate. Our model incorporates features such as borrowing constraints, variation of home ownership preferences and heterogeneous income profiles. Our calibrated model successfully matches the historical housing vacancy rate in Singapore. Quantitative analysis shows that depreciation rates, initial rental and house price, market interest rate and house value appreciation rate affect housing vacancy rate differently. Results suggest that an increase in initial housing price accompanied with an increase in vacancy rates could signal the presence of a speculative housing bubble.
Rights: Nanyang Technological University
Fulltext Permission: restricted
Fulltext Availability: With Fulltext
Appears in Collections:HSS Student Reports (FYP/IA/PA/PI)

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