Determining Variables of Rent to Price Ratio and Efficiency of Housing Market in Tehran

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Nafari, Kaveh | 2012

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 43168 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Fatemi, Farshad; Barakchian, Mahdi
Abstract:
In this project we tried to examine the effective variables on rent to price ratio and how the variations in R/P influence households’ decisions. Using rent to price ratio, the efficiency of Housing market has been inspected. However, the results for Tehran are in contrast to efficiency assumptions. Moreover, having access to unique database which remarkably increase the accuracy of our estimation, the relation between rent risks and House price has been examined. The results show that rent fluctuations has positive impact on house price. Rent to Price ratio has different applications and we tried to determine the variables that can explain this ratio. Literature review demonstrate that unit characteristics like age and area, its location, house price and vacancy can considerably explain the variation in the rent to price ratio. Moreover, any accurate estimations in needs exact information about the price, rent, and other characteristics for each house. Using an unique database which has above characteristics, we found that area, age and house’s location can remarkably explain the rent to price ratio
Keywords:
Housing Price ; Rent ; House Characteristics ; Rent to Price Ratio ; Unit Locations ; Housing Market

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