Advertising and Natural Vacancies in Rental Housing Markets

Read, Colin

doi:10.1111/1540-6229.00460

Cited by 21 publications

(7 citation statements)

References 3 publications

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“…The classic treatment of housing market dynamics is on its level of “efficiency” (Gatzlaff and Tirtiroglu, 1995; Case and Shiller, 1989; Keogh and D'Arcy, 1999) and the stock/rental adjustment processes (Dipasquale and Wheaton, 1994; Gabriel and Nothaft, 1988; Read, 1988; Wheaton, 1990). Current theory of fluctuations in residential markets typically concerns “housing bubbles” which are unsustainable price surge that do not fit with societal fundamentals (Black et al , 2006; Case and Shiller, 1994; Glaeser et al , 2008).…”

Section: Housing Cycle and Housing Bubblementioning

confidence: 99%

Understanding property cycles in a residential market

Reed

2010

Property Management

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PurposeThis paper aims to review property cycle theory and the relevance of the larger body of knowledge about cycles with reference to the housing market. It also aims to highlight the lack of research into property cycles in the residential sector on a suburb or smaller region basis, as well as the potential for increased knowledge about cycles to assist to avoid housing stress.Design/methodology/approachThe paper conducts a literature review of previous cycle research and encourages the use of cycle theory. It discusses the established body of knowledge about business cycles and the office market sector, as well as investigating levels of housing affordability and how detailed knowledge about property cycles can assist to decrease housing affordability in residential areas, which will eventually experience a downturn.FindingsIt is argued that an increased level of certainty about cycle behaviour in particular suburbs will give households a higher level of confidence when considering whether and when to enter the market. Property cycle research has the potential to assist low‐income homeowners to better understand the characteristics of cycles and associated risks in each residential.Research limitations/implicationsThis is a conceptual paper and has conducted a review of cycle research and housing affordability in certain countries. Some areas or countries may be affected to varying degrees by property cycles and levels of housing affordability.Practical implicationsIn extended periods of high volatility it is argued that a better understanding of housing cycles will allow more homeowners to avoid negative equity and the stress associated with repossessions. Property cycles are unavoidable although there is typically relatively little information available in the open market about the timing and amplitude of cycles in individual areas.Originality/valueThis paper is unique as it highlights the potential for property cycles to be used to avoid housing stress in the residential market. Traditionally cycle research is used to increase returns and avoid downturns in the office and/or business sectors.

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Section: Housing Cycle and Housing Bubblementioning

confidence: 99%

Understanding property cycles in a residential market

Reed

2010

Property Management

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“…Arnott (1989) used such a way of modelling the search process of a landlord. Read (1988) models the active search behaviour of landlords with vacant units. Search in Read's model is active as landlords are assumed to be able to affect the arrival rate of tenants at their vacant unit through the effort they put into advertising.…”

Section: The Choices Of One Single Owner Of a Single-family Housementioning

confidence: 99%

Utilisation of the Stock of Owner-occupied Single-family Houses: An Econometric Analysis

Nordvik¹

2000

Urban Studies

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In many 'single-family' houses, the owner has the option to let a part of the house to another party or to use the entire house for her own purposes. This paper uses a stochastic utility framework to provide a theoretical analysis of this dichotomous choice. The paper also shows how an empirical model that is consistent with the theoretical model can be formulated and estimated using suitable parameterisation. Within the empirical analysis, we test, and reject, the hypothesis of locally linear utility functions that are frequently used in models of discrete housing choices. Furthermore, the estimated model is used to show how the tax treatment of owner-occupiers affects the utilisation of the stock of single-family houses.

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“…The issue is what level of demand shock can actually optimize all developers' total revenue and sustain equilibrium (that is, when the strategic game holds). Certainly, the demand shock trigger points X e L and X e F found in "Developers' Game with a Market Clearance Condition" in which the resulting 12 One of the causes of natural vacancy is the matching delay between supply and demand, as mentioned in Read (1988). 13 At this flat end of the demand function, renting out any additional unit cannot increase the total rental income any further because the costs of providing more services by landlords, such as searching and leasing costs as well as loss of tenants, become very high.…”

Section: Collusion In Rentmentioning

confidence: 99%

Stickiness of Rental Rates and Developers’ Option Exercise Strategies

Lai¹,

Wang

Yang

2007

J Real Estate Finan Econ

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In this study we incorporate sticky rents into a real options model to rationalize the widely documented overbuilding puzzle in real estate markets. Given the assumption that developers’ objective function is to maximize total revenue by selecting an optimal occupancy level, our model provides a better explanation of the phenomena we observed in the real world than the traditional market-clearance based real options models. We also show that developers’ exercise strategies can be affected by the size and the type of property markets. In other words, developers’ exercise strategies could differ among markets and under different conditions. Copyright Springer Science+Business Media, LLC 2007Sticky rents, Overbuilding, Real options,

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Advertising and Natural Vacancies in Rental Housing Markets

Cited by 21 publications

References 3 publications

Understanding property cycles in a residential market

Understanding property cycles in a residential market

Utilisation of the Stock of Owner-occupied Single-family Houses: An Econometric Analysis

Stickiness of Rental Rates and Developers’ Option Exercise Strategies

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