Irish Property Price Estimation Using A Flexible Geo-spatial Smoothing Approach: What is the Impact of an Address?

Accurate and efficient valuation of property is of utmost importance in a variety of settings, such as when securing mortgage finance to purchase a property, or where residential property taxes are set as a percentage of a property's resale value. Internationally, resale based property taxes are most common due to ease of implementation and the difficulty of establishing site values. In an Irish context, property valuations are currently based on comparison to recently sold neighbouring properties, however, this approach is limited by low property turnover. National property taxes based on property value, as opposed to site value, also act as a disincentive to improvement works due to the ensuing increased tax burden. In this article we develop a spatial hedonic regression model to separate the spatial and non-spatial contributions of property features to resale value. We mitigate the issue of low property turnover through geographic correlation, borrowing information across multiple property types and finishes. We investigate the impact of address mislabelling on predictive performance, where vendors erroneously supply a more affluent postcode, and evaluate the contribution of improvement works to increased values. Our flexible geo-spatial model outperforms all competitors across a number of different evaluation metrics, including the accuracy of both price prediction and associated uncertainty intervals. While our models are applied in an Irish context, the ability to accurately value properties in markets with low property turnover and to quantify the value contributions of specific property features has widespread application. The ability to separate spatial and non-spatial contributions to a property's value also provides an avenue to site-value based property taxes.

Impact of House Price on Economic Stability: Some Lessons from OECD Countries.

Despite having abundant literature blaming a faulty financial system and exuberant price expectations as the primary causes of housing bubbles, there is a lack of research that looks at the impact of house price instability on the economy. This study aims to fill this gap by thoroughly examining the connection between house prices and economic output, and the effect of house price volatility on economic stability. Drawing from long-spanning quarterly data from 17 OECD countries from 1970 to 2019, the study develops and tests economic growth and volatility models to uncover significant insights. The empirical results show that house price returns have a significant asymmetric impact on economic growth, with negative returns having twice the effect of positive ones. Moreover, the results indicate that house price volatility significantly contributes to economic instability. In light of these findings, the paper concludes with valuable policy recommendations to enhance the housing market and improve overall economic stability. This study provides a compelling argument for the importance of closely monitoring and regulating the real estate market in order to maintain a healthy and stable economy.

Housing market volatility under COVID-19: Diverging response of demand in luxury and low-end housing markets.

The ongoing pandemic has led to substantial volatility in residential housing markets. However, relatively little is known about whether the volatility is dominated by housing demand or supply, and how different priced markets contribute to the volatility. This article first examines the temporal effect of COVID-19 on house prices, housing demand, and supply in Los Angeles, and second explores the effect heterogeneity in luxury and low-end housing markets within the city. For identification, the article employs a revised difference-in-differences (DID) method that controls more rigorously for unobservables and improves on the traditional DID with smaller prior trends. Using individual level data, the result first shows that, in response to the outbreak, house prices, demand, and supply all decreased in March to May 2020 and increased in July and August 2020, with demand dominating the process. Second, the heterogeneity exploration identifies diverging COVID-19 impacts in higher- and lower- priced markets. Particularly, the decline in overall price and demand before June originates mainly from the lower-priced market while the higher-priced one experienced limited changes in demand. After July, higher-priced markets led housing market's surge in price, demand, and supply, whereas the lower-priced market has not fully recovered from decreases in house prices and housing demand. Finally, a larger price decline in lower-priced markets is found to be associated with higher service shares and lower homeownership rates. The results not only facilitate market participants in their decision making but also aid local governments in formulating policies and allocating subsidies to mitigate the effects of the outbreak.

Evaluating the impact of housing market liberalization on the timing of marriage: Evidence from Egypt.

The transition to adulthood around the world is increasingly characterized by young people's desire to form independent households. Forming such households in Egypt requires buying or building a dwelling or obtaining a rental unit. Policies governing housing markets, such as rent control, and limited financing options have historically made access to housing for young couples challenging. In this paper, we use a difference-in-difference approach to evaluate how the liberalization of rental markets in Egypt affected the timing of marriage. We find that Egypt's 1996 rental reforms accelerated marriages and led to a reversal in the trend of rising age at marriage.

Monetary policy and US housing expansions: The case of time-varying supply elasticities.

We challenge the assumption in the literature of constant housing supply elasticities across housing expansions. Using a time-varying parameter (TVP)-VAR model on monthly US data since the early 1990s, we find that the response of housing supply to an expansionary monetary policy shock relative to the response of house prices has declined substantially since the Great Financial Crisis (GFC). Our findings are consistent with research suggesting that land-use regulation has tightened. Absent major reversions in regulation, our results point to a post-COVID-19 housing recovery characterised by a sluggish response of housebuilding to demand, but a relatively stronger response of house prices.

Adverse neonatal outcomes and house prices in London.

Objective To explore whether the average price of houses per postcode sector [sector house average prices (SHAP)] is related to perinatal outcomes and whether gestational age would be lower and mortality higher in the least expensive areas compared to the most expensive. Methods All neonatal unit admissions at King's College Hospital from 1/1/2012 to 31/12/2016 were reviewed. The SHAP was retrieved from the Land Registry and the population was divided in equal quintiles with quintiles 1 and 5 representing the most and least expensive areas, respectively. Gestational age and birth weight z-score were collected. Mortality was defined as death before discharge from neonatal care. Results Three thousand three hundred and sixty infants were included and divided in quintiles consisting of 672 infants. Gestational age was lower in quintile 5 compared to all other quintiles (adjusted P<0.001). Birthweight z-score was not significantly different between the quintiles. The SHAP was lower in the infants who died before discharge (n=92) compared to the SHAP of the infants who were alive at discharge (n=3268) (P<0.001). Infants of quintile 5 had 6 times higher risk of death before discharge from neonatal care compared to infants of quintile 1. Conclusion Low SHAPs were associated with poorer perinatal outcomes suggesting SHAP could potentially be used in perinatal populations to determine socio-economic status and associated outcomes.

Assessing the Economic Benefits of Flood Defenses: A Repeat-Sales Approach.

In this article we identify the impact of the construction of flood defenses on property prices using a difference-in-differences repeat-sales methodology. Our data set contains information on over 12 million individual property transactions, which is merged with GIS data identifying the spatial location and main characteristics of 1,666 flood defenses built in England between 1995 and 2014. Results suggest that at the finer 6-digit postcode level the construction of flood defenses raises urban house prices by 12.6% to 16.7%. However, for rural properties at the slightly coarser 5-digit postcode level the construction of defenses reduces house prices by 0.8% to 5.0%. This suggests that in certain locations the disamenity impact of flood defenses and the perceived threat of redirected flooding outweigh the benefits of reduced flood risk.

Risks and interrelationships of subdistrict house prices: the case of Amsterdam.

This paper uses individual house transaction data from 1995 to 2014 in Amsterdam to explore the risks and interrelationships of the subdistrict house prices. Simple indicators suggest that house prices grow faster and are more risky in the central business district and its immediate surrounding areas than in the peripherals. Furthermore, we observe an over time decreasing intervariations between the subdistrict house price growth rates, whereas we find a lead-lag and house price causal flow from the more central to the peripheral subdistricts.

The effect of earthquakes on the housing market and the quality of life in the province of Groningen, the Netherlands.

The Netherlands is not known for the occurrence of earthquakes. This is, however, a hot topic in the province of Groningen. Because of gas extraction, this area suffered from more than 1000 earthquakes. Most of them are not very intensive, but also bigger earthquakes of between 2 and 3 on the scale of Richter have been measured. In the last few years, thousands of houses are damaged, house prices have dropped, and the liveability is at stake. This paper pays attention to the effects of these earthquakes on the functioning of the housing market and the quality of life in the region. An extensive survey was conducted, focus groups were organized, housing market statistics were analyzed, and several econometric models were evaluated to give an answer to the question in which way the earthquakes influence the local housing market and the liveability.

The mismatch between conventional house price modeling and regulated markets: insights from The Netherlands.

House price modeling has been frequently used to investigate the dynamics of housing markets, especially competitive markets; yet less attention has been given to markets that have experienced considerable interventions. The aim of this study is to demonstrate a mismatch between conventional house price models and the case of the Netherlands and to provide reasons of such mismatch. We first describe and classify the conventional house price models into asset-pricing house price model, stock-flow model, multi-period utility model, and repayment model. These models are subsequently applied to the Netherlands, where considerable government interventions took place. As expected, the empirical results are unsatisfactory to explain the Dutch house price development. The degree of mismatch of the repayment model and the multi-period utility model, however, seems to be fairly limited.

Do Wealth Shocks Affect Health? New Evidence from the Housing Boom.

We exploit large exogenous changes in housing wealth to examine the impact of wealth gains and losses on individual health. In UK household, panel data house price increases, which endow owners with greater wealth, lower the likelihood of home owners exhibiting a range of non-chronic health conditions and improve their self-assessed health with no effect on their psychological health. These effects are not transitory and persist over a 10-year period. Using a range of fixed effects models, we provide robust evidence that these results are not biased by reverse causality or omitted factors. For owners' wealth gains affect labour supply and leisure choices indicating that house price increases allow individuals to reduce intensity of work with commensurate health benefits. © 2016 The Authors. Health Economics Published by John Wiley & Sons, Ltd.

Changes in life expectancy and house prices in London from 2002 to 2019: hyper-resolution spatiotemporal analysis of death registration and real estate data.

Background: London has outperformed smaller towns and rural areas in terms of life expectancy increase. Our aim was to investigate life expectancy change at very-small-area level, and its relationship with house prices and their change. Methods: We performed a hyper-resolution spatiotemporal analysis from 2002 to 2019 for 4835 London Lower-layer Super Output Areas (LSOAs). We used population and death counts in a Bayesian hierarchical model to estimate age- and sex-specific death rates for each LSOA, converted to life expectancy at birth using life table methods. We used data from the Land Registry via the real estate website Rightmove (www.rightmove.co.uk), with information on property size, type and land tenure in a hierarchical model to estimate house prices at LSOA level. We used linear regressions to summarise how much life expectancy changed in relation to the combination of house prices in 2002 and their change from 2002 to 2019. We calculated the correlation between change in price and change in sociodemographic characteristics of the resident population of LSOAs and population turnover. Findings: In 134 (2.8%) of London's LSOAs for women and 32 (0.7%) for men, life expectancy may have declined from 2002 to 2019, with a posterior probability of a decline >80% in 41 (0.8%, women) and 14 (0.3%, men) LSOAs. The life expectancy increase in other LSOAs ranged from <2 years in 537 (11.1%) LSOAs for women and 214 (4.4%) for men to >10 years in 220 (4.6%) for women and 211 (4.4%) for men. The 2.5th-97.5th-percentile life expectancy difference across LSOAs increased from 11.1 (10.7-11.5) years in 2002 to 19.1 (18.4-19.7) years for women in 2019, and from 11.6 (11.3-12.0) years to 17.2 (16.7-17.8) years for men. In the 20% (men) and 30% (women) of LSOAs where house prices had been lowest in 2002, mainly in east and outer west London, life expectancy increased only in proportion to the rise in house prices. In contrast, in the 30% (men) and 60% (women) most expensive LSOAs in 2002, life expectancy increased solely independently of price change. Except for the 20% of LSOAs that had been most expensive in 2002, LSOAs with larger house price increases experienced larger growth in their population, especially among people of working ages (30-69 years), had a larger share of households who had not lived there in 2002, and improved their rankings in education, poverty and employment. Interpretation: Large gains in area life expectancy in London occurred either where house prices were already high, or in areas where house prices grew the most. In the latter group, the increases in life expectancy may be driven, in part, by changing population demographics. Funding: Wellcome Trust; UKRI (MRC); Imperial College London; National Institutes of Health Research.

Stuck at home: Housing demand during the COVID-19 pandemic.

The COVID-19 pandemic induced an increase in both the amount of time that households spend at home and the share of expenditures allocated to at-home consumption. These changes coincided with a period of rapidly rising house prices. We interpret these facts as the result of stay-at-home shocks that increase demand for goods consumed at home as well as the homes that those goods are consumed in. We first test the hypothesis empirically using US cross-county panel data and instrumental variables regressions. We find that counties where households spent more time at home experienced faster increases in house prices. We then study various pandemic shocks using a heterogeneous agent model with general equilibrium in housing markets. Stay-at-home shocks explain around half of the increase in model house prices in 2020. Lower mortgage rates explain around one third of the price rise, while unemployment shocks and fiscal stimulus have relatively small effects on house prices. We find that young households and first-time home buyers account for much of the increase in housing demand during the pandemic, but they are largely crowded out of the housing market by the equilibrium rise in house prices.

Property Taxes and Growth Patterns in China: Multiple Causal Inference Methods.

According to neoclassical growth theory, there are two main patterns of economic growth, namely, intensive growth, which depends on total factor productivity (TFP), and extensive growth, which relies on factor input. This study explores the impacts of property taxes on growth patterns by considering the property tax pilots in Shanghai and Chongqing as a quasi-natural experiment. For evaluation, we applied multiple causal inference methods, including DID, PSM-DID, and a panel data approach for program evaluation. We found that the pilot of Shanghai contributed to intensive growth, while the pilot of Chongqing reinforced the prevailing extensive growth. Specifically, Shanghai's property taxes restricted the buying of multiple homes and oversized homes, thereby reducing house prices and increasing TFP. Chongqing's property taxes are mainly for high-end houses, causing the substitution effect between high-end homes and ordinary houses; thus, the pilot increased the prices of ordinary houses and the average house price, which stimulated factor input and economic growth but decreased TFP. This study provides empirical evidence of the causal relationships between property taxes and growth patterns, indicating that transitional economies should avoid narrow tax bases during property tax reform for intensive growth.

Does asymmetric nexus exist between agricultural land and the housing market? Evidence from non-linear ARDL approach.

Expectedly, urbanization is often associated with constant degradation of natural habitat. In most cases, as demand for housing increases, natural habitat like agricultural land, forestry, and water bodies gradually gives way to building structures. Against this backdrop, the current study investigates the asymmetric nexus of agricultural land and housing market vis-à-vis house prices. The study employed the yearly data from 1976 to 2015 for the case of Sweden and used economic policy uncertainty (EPU) as a control variable in non-linear autoregressive distributed lag (NARDL) approach. The finding notes a significant and positive short- and long-run relationship between housing price and agricultural land especially when there is a negative shock on agricultural land. But when there is a negative shock on EPU, the impact on housing price is significant and negative for both short run and long run. While an asymmetric long-run relationship is significant and positive between EPU and housing price, such significant occurrence do not exist for agricultural land. Hence, in meeting housing demand and mitigating an escalated growth in house prices, implementation of effective land use policy is encouraged.

Effects of house prices on health: New evidence from Australia.

Recent house price variation has strongly affected households' housing wealth and debt, yet the non-economic consequences of these changes in housing wealth are still poorly understood. Using a sample of 19,000 individuals from the Household, Income and Labour Dynamics in Australia Survey (HILDA) for 2001-2015, we examine the relationship between house price fluctuations and individual health by exploiting large exogenous changes in house prices in Australia. We find that an increase in local house prices is associated with a positive effect on the physical health of outright owners and a negative effect on the physical and mental health of renters. Improvements in physical health for outright owners can be partially attributed to health-related investments and behaviours such as a reduction in weight, an increase in physical exercise and an increase in time allocated to home production. These findings support the presence of a health-wealth gradient through the wealth mechanism distinct from the effects of local area amenities and macroeconomic conditions. Our findings highlight some of the often-overlooked social impacts - both positive and negative - of fluctuations in the housing market.

Local house prices and mental health.

This paper examines the impact of local (county-level) house prices on individual self-reported mental health using individual level data from the United States Behavioral Risk Factor Surveillance System between 2005 and 2011. Exploiting a fixed-effects model that relies on within-county variations, relative to the corresponding changes in other counties, I find that while individuals are likely to experience worse self-reported mental health when local house prices decline, this association is most pronounced for individuals who are least likely to be homeowners. This finding is not consistent with a prediction from a pure wealth mechanism but rather with the hypothesis that house prices act as an economic barometer. I also demonstrate that the association between self-reported mental health and local house prices is not driven by unemployment or foreclosure. The primary result-that lower local house prices have adverse impact on self-reported mental health of homeowners and renters-is consistent with studies using data from the United Kingdom.