The spatial and temporal diffusion of house prices in the UK

Abstract

a b s t r a c tThis paper provides a method for the analysis of the spatial and temporal diffusion of shocks in a dynamic system. We use changes in real house prices within the UK economy at the level of regions to illustrate its use. Adjustment to shocks involves both a region specific and a spatial effect. Shocks to a dominant region -London -are propagated contemporaneously and spatially to other regions. They in turn impact on other regions with a delay. We allow for lagged effects to echo back to the dominant region. London in turn is influenced by international developments through its link to New York and other financial centers. It is shown that New York house prices have a direct effect on London house prices. We analyse the effect of shocks using generalised spatio-temporal impulse responses. These highlight the diffusion of shocks both over time (as with the conventional impulse responses) and over space.

Spatiotemporal Agglomeration of Real-Estate Industry in Guangzhou, China

“…In the field of real estate, little attention has been paid to the spatial distribution and evolution of real estate industry [4], although economists mainly analyze the relations between real estate economy and national economic growth, performance of real estate companies, correlation between real estate industry and capital market, real estate prices and real estate policies [5][6][7]. Examining industrial agglomeration and spatial evolution may shed light on the evolution rules of enterprise clusters [8], for example, how enterprises of the same kind accumulate in a particular space [9].…”

An Early Warning System to Predict Speculative House Price Bubbles

“…The feedback from property prices to credit growth is stronger in countries with more deregulated mortgage markets, see Tsatsaronis and Zhu (2004). For example, borrowing costs exert a negative effect on real house changes in US regions, see Holly et al (2011). Although house prices are usually driven by national forces, international components might be relevant in some cases.…”

An Early Warning System to Predict the House Price Bubbles

“…The feedback from 1 property prices to credit growth is stronger in countries with more deregulated mortgage markets, see Tsatsaronis and Zhu (2004). For example, borrowing costs exert a negative effect on real house changes in US regions, see Holly et al (2010). Although house prices are usually driven by national forces, international components might be relevant in some cases.…”

“…Although house prices are usually driven by national forces, international components might be relevant in some cases. For instance, the evolution of real house prices in London is linked to New York and other financial centers (Holly et al (2010)). …”