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Is There any Price Bubble in the Iranian Housing Market: a Structural Analysis Across Iranian Provinces Over 1375-1389

Ebrahimi, Hassan | 2012

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 43837 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Abedini, Javad
  7. Abstract:
  8. During the two last decades, Iranians have faced with a wide and substantial increase in housing prices, especially in great metropolitans such as Tehran, Mashhad, Isfahan and Shiraz. This easily could be refered to a hyperinflation which significantly impeded the access of low and medium income families to housing. This study uses a structure model to recognize the responsible factors of such a rise in housing prices and to show whether there is any price bubble in market. The model consists of both supply and demand side determinants to explain the price changes across Iranian provinces over 1375-1390, in a panel data context. In particular, we use a longer and larger database which also includes more number of influential factors. Some specific features of data such as non-stationarity and cointegration have been also taken in to account. Our results show that, in contrast with the common thought, there is no price bubble in the Iranian housing sector. That is, the structure model could well explain the rapid increase in Iranian house prices during the last decade. In particular, we find that the expansionary monetary policies of the government, the land limits for urban uses, along with the increase of the real demand for housing are the main reasons of the past hyperinflation in the sector. In average, an increase of a 1 percent in the urban land price or liquidity, ceteris paribus, leads to, respectively, 0.375 and 0.5 percent increase in house prices
  9. Keywords:
  10. Price Bable ; Panel Data ; Contegratio ; Housing Pricing ; Present-Value Model

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