Editorial

Richard Reed (Department of Finance, Deakin University, Melbourne, Australia)

International Journal of Housing Markets and Analysis

ISSN: 1753-8270

Article publication date: 21 May 2018

Issue publication date: 21 May 2018

226

Citation

Reed, R. (2018), "Editorial", International Journal of Housing Markets and Analysis, Vol. 11 No. 2, pp. 226-228. https://doi.org/10.1108/IJHMA-04-2018-104

Publisher

:

Emerald Publishing Limited

Copyright © Emerald Publishing Limited


Welcome to the second issue in the eleventh volume of the International Journal of Housing Markets and Analysis. This year represents the tenth anniversary of the commencement of this journal, and over this period, there have been many changes in both the journal and the discipline of housing market analysis. Continually over the preceding decade, the journal has expanded both the number of issues and the total papers in each issue, as the level of submissions and the quality of housing research have increased substantially. Prior to the commencement of this journal, the emphasis in the property and real estate discipline was largely placed on the commercial areas such as retail and office property, where housing was predominantly viewed as providing shelter rather than as an alternative investment medium. Today there is substantial interest in housing, which is both the largest urban land use and also equates to the highest aggregate value for individual land use. Many journals also focus on the developed countries and the operation of housing markets therein. However, another strength of this journal is the emphasis on research into emerging and developing markets, which will be tomorrow’s developed housing markets. Let’s look forward to the next decade of The International Journal of Housing Markets and Analysis and the ongoing contribution to knowledge about the evolution of our housing markets. The eight countries examined in the nine papers in this issue are typical of the broad coverage of countries, with the topics ranging from the effect of “graves” on house values to the relevance of a mortgage foreclose on the overall market.

The first paper from Italy compares two innovative research methodologies, namely, “utility additive” and “evolutionary polynomial regression”, for the mass appraisal of residential properties. The data are sourced from three Italian cities, including Rome, Naples and Bari in southern Italy. The findings confirm both the potential and the limitations of the two methodologies used in this research, as well as the potential to use both approaches jointly to interpret and predict changes in the real estate market. The second paper from Ireland seeks to quantify and measure the (dis)amenity effects on house price levels within specific housing submarkets based on their geographic location. The methodology used a quantile regression approach to examine the marginal impacts for different quantiles of the price distribution based on data relating to 3,780 house sale transactions in the Belfast housing market. The findings confirm that housing characteristics are valued differently between quantiles and that conditional quantiles are asymmetrical.

The third paper examines over 3,000 house transactions in South Africa and investigates the application of particle swarm optimisation and back-propagation in the weight optimisation and the training of artificial neural networks within the mass appraisal industry. It also compared the performance with stand-alone back-propagation, genetic algorithm with back-propagation and regression models. The findings confirmed that combining particle swarm optimisation with back-propagation in global and local searches for attribute weights enhanced the predictive accuracy of artificial neural networks. In addition, this also enhanced the level of transparency because it highlighted the relative importance of the attributes. The fourth paper from Malta uses an aggregate misalignment index based on a multiple indicator approach to identify the under- or overvaluation of house prices. The methodology used principal components analysis, and the analysis confirmed that the house prices in Malta were overvalued by about 20 to 25 per cent in the pre-crisis boom period. It was argued that this level of house price misalignment has implications for both the economy and overall financial stability.

The fifth paper from Malaysia examined the Malaysian housing market in detail from 2002 to 2015. In particular, it investigated the macroeconomic determinants of the house prices and the housing demands. A Structural Vector Autoregressive Regression (SVAR) model was used to estimate unexpected changes in both the housing demands (based on the residential transaction volume) and prices based on the economic theoretical reasoning that considers shock from macroeconomics. The findings confirmed that transaction volume and real house prices respond to most of the macroeconomic shocks. While the impact of real GDP on house prices appeared to be stronger and over a longer period in comparison to other macroeconomic shocks, a 60 per cent change in house prices can be explained by real GDP, regardless over the short run or the long run. It was also shown that a positive effective exchange rate has an important role when demonstrating the transaction volume. The sixth paper from Botswana sought to evaluate the housing delivery to the low-income groups by the Self-Help Housing Agency (SHHA) programme in Gaborone, Botswana. The findings showed that the programme has been faced with challenges including the low-income cohort selling their houses to the middle income cohort, thus leading to gentrification. It was also established that the number of sales in SHHA areas were increasing as proven from the transfers that were examined. This could be influenced by the increasing demand for housing due to a growing population in Gaborone. The implication of these findings is that low-income households will be displaced and may become homeless in future, therefore creating an opportunity for illegal settlements to develop.

The seventh paper from Malaysia developed a spatio-temporal neighbourhood-level house price index (STNL-HPI) by incorporating a geographic information system (GIS) functionality that can be used to improve the house price indexation system. The outcomes were that by using the Malaysian House Price Index (MHPI) and the application of geographically weighted regression (GWR), GIS-based analysis of STNL-HPI through an application called LHPI Viewer v.1.0.0, the stand-alone GIS-statistical application for STNL-HPI was successfully developed. The findings confirmed that the modelling and the GIS application were able to assist users to understand the visual variations of house prices based on their spatial location. The eighth paper from the USA analyses the differences between the actual mortgage prompt and the late payments and their respective expected measures to identify early symptoms of housing crisis. The discrepancies are examined across the entire US market and along various delinquency lengths of 30, 60 and 90 days. Then, a Bayesian forecasting model is created which relies on prior distributional properties of diverse time horizons. The findings confirmed that when abnormal mortgage delinquency rates are identified in real time, they can be used as early indicators of a potential housing crisis. It was proposed that this model can potentially function as a valuable predictive tool for lending institutions, bank audit companies, regulatory bodies and real estate professional investors, who examine changes and trends in the markets.

The ninth and the final paper from Nigeria examines the acceptability of the potential discounts to rent as compensation for the imposed impact of a grave on a tenanted home. Therefore, it is a test of the classic case of internalising the externality and addresses the question on the acceptability of a discount as a trade-off for a loss in welfare and utility in a house with a grave. The methodology involved household surveys, which were analysed using a choice-based conjoint analysis to assess the tenants’ sensitivity to potential discounts. The findings of the study suggest the loss of welfare from a grave located in the front garden is approximately between 15 and 20 per cent of open market rent. However, it is uncertain whether this is reflected in actual house prices, as the negative externality is potentially not likely to be internalised in the level of market rent.

These nine papers are diverse and cover the housing markets in both the developed and the developing countries. They confirm that the common theme of housing research can provide insights from each country and make a substantial contribution to the existing literature. Please contact the editor directly if I can be of assistance prior to submission and/or discuss the procedure for admission into the review process. If you are interested in submitting a research paper or reviewing potential publications, please contact the editor direct at ijhma@ijhma.com.

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