REAL ESTATE MARKET OF A BRAZILIAN METROPOLIS: SUSTAINED GROWTH OR SPECULATIVE BUBBLE?
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| Natura: | Artículo científico |
| Lingua: | en |
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Universidade Presbiteriana Mackenzie
2017
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| _version_ | 1876453352048427008 |
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| author | RONALDO LAMOUNIER LOCATELL |
| author_facet | RONALDO LAMOUNIER LOCATELL |
| contents | REAL ESTATE MARKET OF A BRAZILIAN METROPOLIS: SUSTAINED GROWTH OR SPECULATIVE BUBBLE? RONALDO LAMOUNIER LOCATELL HAROLDO MARCIO INÊS JOSÉ EDSON LARA FERNANDO TADEU PONGELUPE NOGUEIRA Administración y Contabilidad to Rent VECM Index Price Financial crisis Purpose: To analyze the real estate sector of a Brazilian metropolis in the recent period of great valuation of the asset in the country and to inves- tigate if there are signs of a speculative bubble in this market. Originality/gap/relevance/implications: This article presents a version of the Case-Shiller Index, which describes the evolution of the rela - tionship between house prices and rental prices and uses models in order to identify if the rise in property prices rests on good economic fundamentals. Key methodological aspects: The approach is quantitative and involves the construction of the price-rent index, unit root test with an instru - ment that allows structural break with trend (Innovation Outlier Model) and analysis of cointegration using estimates of a Vector Error Correc- tion Model (VECM). Summary of the results: The results do not favor the interpretation that the real estate market rests on solid economic fundamentals. On the contrary, the evolution of the price-rent index and the lack of causal relationship of rents to prices towards long-term equilibrium are sugges- tive of the existence of a speculative bubble. Key considerations/conclusions: The results support authors who are cri- tical to the efficient market hypothesis (EMH) and suggest that the rela- tive increase in property prices stems only from the belief that their selling price will be higher in the future. It is therefore foreseeable a decrease of real prices of housings, with equity losses for the partici - pants in that market. 2017 artículo científico 1518-6776 https://www.redalyc.org/articulo.oa?id=195451649009 https://www.redalyc.org/journal/1954/195451649009/ https://www.redalyc.org/journal/1954/195451649009/html/ https://www.redalyc.org/journal/1954/195451649009/195451649009.epub https://www.redalyc.org/journal/1954/195451649009/movil en http://www.redalyc.org/revista.oa?id=1954 RAM. Revista de Administração Mackenzie application/pdf Universidade Presbiteriana Mackenzie RAM. Revista de Administração Mackenzie (Brasil) Num.2 Vol.18 |
| format | Artículo científico |
| id | redalyc_195451649009 |
| institution | Redalyc |
| language | en |
| publishDate | 2017 |
| publisher | Universidade Presbiteriana Mackenzie |
| spellingShingle | REAL ESTATE MARKET OF A BRAZILIAN METROPOLIS: SUSTAINED GROWTH OR SPECULATIVE BUBBLE? RONALDO LAMOUNIER LOCATELL Administración y Contabilidad to Rent VECM Index Price Financial crisis REAL ESTATE MARKET OF A BRAZILIAN METROPOLIS: SUSTAINED GROWTH OR SPECULATIVE BUBBLE? RONALDO LAMOUNIER LOCATELL HAROLDO MARCIO INÊS JOSÉ EDSON LARA FERNANDO TADEU PONGELUPE NOGUEIRA Administración y Contabilidad to Rent VECM Index Price Financial crisis Purpose: To analyze the real estate sector of a Brazilian metropolis in the recent period of great valuation of the asset in the country and to inves- tigate if there are signs of a speculative bubble in this market. Originality/gap/relevance/implications: This article presents a version of the Case-Shiller Index, which describes the evolution of the rela - tionship between house prices and rental prices and uses models in order to identify if the rise in property prices rests on good economic fundamentals. Key methodological aspects: The approach is quantitative and involves the construction of the price-rent index, unit root test with an instru - ment that allows structural break with trend (Innovation Outlier Model) and analysis of cointegration using estimates of a Vector Error Correc- tion Model (VECM). Summary of the results: The results do not favor the interpretation that the real estate market rests on solid economic fundamentals. On the contrary, the evolution of the price-rent index and the lack of causal relationship of rents to prices towards long-term equilibrium are sugges- tive of the existence of a speculative bubble. Key considerations/conclusions: The results support authors who are cri- tical to the efficient market hypothesis (EMH) and suggest that the rela- tive increase in property prices stems only from the belief that their selling price will be higher in the future. It is therefore foreseeable a decrease of real prices of housings, with equity losses for the partici - pants in that market. 2017 artículo científico 1518-6776 https://www.redalyc.org/articulo.oa?id=195451649009 https://www.redalyc.org/journal/1954/195451649009/ https://www.redalyc.org/journal/1954/195451649009/html/ https://www.redalyc.org/journal/1954/195451649009/195451649009.epub https://www.redalyc.org/journal/1954/195451649009/movil en http://www.redalyc.org/revista.oa?id=1954 RAM. Revista de Administração Mackenzie application/pdf Universidade Presbiteriana Mackenzie RAM. Revista de Administração Mackenzie (Brasil) Num.2 Vol.18 |
| title | REAL ESTATE MARKET OF A BRAZILIAN METROPOLIS: SUSTAINED GROWTH OR SPECULATIVE BUBBLE? |
| topic | Administración y Contabilidad to Rent VECM Index Price Financial crisis |
| url | https://www.redalyc.org/articulo.oa?id=195451649009 https://www.redalyc.org/journal/1954/195451649009/ https://www.redalyc.org/journal/1954/195451649009/html/ https://www.redalyc.org/journal/1954/195451649009/195451649009.epub https://www.redalyc.org/journal/1954/195451649009/movil |