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Sustainability 2016, 8(11), 1082; doi:10.3390/su8111082

A Vector Auto Regression Model Applied to Real Estate Development Investment: A Statistic Analysis

1
School of Management, China University of Mining & Technology, Xuzhou 221116, China
2
Department of Economics, Ritsumeikan University, Kusatsu 525-8577, Japan
3
Department of Electrical, Electronic & Computer Engineering, University of Pretoria, Pretoria 0002, South Africa
4
College of Economics and Management, Northwest A & F University, Yangling 712100, China
5
UNSW Australia, Sydney 2052, Australia
*
Author to whom correspondence should be addressed.
Academic Editor: Bhavik Bakshi
Received: 20 August 2016 / Revised: 10 October 2016 / Accepted: 18 October 2016 / Published: 25 October 2016
(This article belongs to the Section Sustainable Engineering and Science)
View Full-Text   |   Download PDF [973 KB, uploaded 25 October 2016]   |  

Abstract

This study analyzes the economic system dynamics of investment in real estate from mainly four participants in China. Local governments limit the supply of commercial and residential land to raise fiscal revenue, and expand debts by land mortgage to develop industrial zones and parks. Led by local government, banks and real estate development enterprises forge a coalition on real estate investment and facilitate real estate price appreciation. The above theoretical model is empirically evidenced with VAR (Vector Auto Regression) methodology. A panel VAR model shows that land leasing and real estate price appreciation positively affect local government general fiscal revenue. Additional VAR models find that bank credit in addition to private and foreign funds respectively have strong positive dynamic effects on housing prices. Housing prices also have a strong positive impact on speculation from private funds and hot money. View Full-Text
Keywords: socioeconomic; economic system dynamics; real estate investment; statistical analysis socioeconomic; economic system dynamics; real estate investment; statistical analysis
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Liu, F.; Matsuno, S.; Malekian, R.; Yu, J.; Li, Z. A Vector Auto Regression Model Applied to Real Estate Development Investment: A Statistic Analysis. Sustainability 2016, 8, 1082.

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