Editorial

Citation

Reed, R.G. (2021), "Editorial", International Journal of Housing Markets and Analysis, Vol. 14 No. 4, pp. 633-635. https://doi.org/10.1108/IJHMA-08-2021-152

Welcome to the fourth issue in the 14th volume of the International Journal of Housing Markets and Analysis. The nine papers in this issue are strong evidence of the diverse range of global housing market topics requiring high quality research to address pertinent research questions and problems. With the continual challenges facing economies, including the COVID-19 pandemic, housing is arguably the most important economic good being both a consumer good and an investment good. It is also accepted the aggregate value of global land used for housing remains the highest of all land use categories. Substantial housing research is required, therefore, and will continue to examine critical issues including affordability, price levels, optimal housing types, economic considerations, sustainability, supply and many other housing issues.

The first paper from Ireland examines the implications for housing markets from the economic slowdown because of the COVID-19 virus. The model includes a residential market activity variable and then estimates the impact on house prices from the decline on economic activity because of virus-related measures. The likely future path of house prices as based on two different recovery scenarios is also examined. Under both scenarios, the level of house prices is forecast to decline over the short-term. The findings from the scenario analysis indicated that Irish house prices are set to fall as a result of the COVID-19 downturn. This contraction in price levels is due to the decline in household disposable income and the sharp decline in mortgage market activity resulting from the compulsory administrative closedown. The second paper investigates the time-frequency linkages between international housing markets and macroeconomic drivers. The research used a state-of-the-art econometric technique based on wavelets to assess how differences in the time variable impacted the relationship between international housing markets and key macroeconomic variables. Another objective was to analyse the direction of causation in the relationships. The findings indicated that the relationship between house prices and key macroeconomic indicators vary significantly based on the variables including different countries, time, frequencies and also the direction of causation. Furthermore, the level of house prices was related to interest rates at higher frequencies (short run) and per capita income growth at lower frequencies (long run). Over time, the role of industrial production and income growth has reversed at lower frequencies, particularly in Finland, France, Sweden and Japan. The stock market’s nexus with the housing market is significant, mainly at high to medium frequencies around the recent financial crisis. The results suggest that policymakers seeking to bring social change to housing markets need to account for time–frequency dynamics.

The third paper from England examines the association between local retail grocery provision and private residential rental prices. This is based on the premise that renting is a core sector of the housing market and also local grocery provision is an important aspect of service provision where consumers are known to be highly sensitive to the branding of this type of retailing. The data is drawn from a property rental web platform and then used to estimate a hedonic model for the rental market. The models incorporate information about the characteristics of the properties and their neighbourhoods where the emphasis is placed on how different retail brands are associated with rental prices. The retail brand is captured on two scales, being the provision of local branded convenience stores and the provision of larger stores. The findings identified clear differentials about how local grocery brands are associated with rental prices. After controlling for specific factors, “luxury” retailers were associated with higher rental prices, whereas “discounter” retailers were associated with lower rental prices. There are many implications from these outcomes, particularly in relation to potential price changes in an already challenging housing market. The fourth paper from India studies the influence of young adults’ socialisation and product involvement on the family housing and real estate purchase decision-making process. Although previous studies used these constructs in the rapidly changing commercial goods context, this analysis places the real estate family purchase decision as the central component. The data was collected from 429 young working adults across various sectors with the conceptual framework and methodology based on a structural equation modelling approach. The findings suggested that teenagers with a high level of social life have a larger influence on the decision-making process. It was also found that the young adults’ product involvement construct, as measured in terms of gratification and symbol, indicated their level of involvement with the final decision in a family. It was concluded that the higher the level of socialisation by a young adult, then the larger their influence on the family housing and real estate decision-making process.

The fifth paper from New Zealand assessed to what extent, if any, social housing had a negative effect on nearby residential property values. This study develops proximity and concentration measures of social housing to determine if their spatial distribution affects property values. The data set comprised in excess of 32,000 residential sales transactions undertaken in Auckland. It used a hedonic framework with the addition of spatial (SARAR) and spatiotemporal (STAR) models to test if proximity and concentration of social housing influenced residential property values. The research found that private houses that share boundaries with public housing are discounted between 1.7% and 3.3%, although this depends on the socio-economic status of each submarket. In addition, wealthier submarkets appear better equipped to absorb negative externalities associated with social housing. Proximity measures peak at a distance of approximately 250 metres with house prices discounted up to 5% within that distance. Concentration levels of social housing had a greater influence on the private residential market. The negative effect was the largest in the neighbourhoods that were socially and economically deprived. The sixth paper from Fiji examined the potential existence of house price bubbles. The core objective of the research was to investigate the equilibrium house price and then to analyse the potential characteristics of a housing bubble. This methodology adopted a time series approach to examine the presence of house price bubbles from 1988 to 2018. The findings showed that real income, land cost, building material price, inflation rate, volatility, household size and wealth have a positive impact on house prices, whereas the user cost of capital and coup had a negative impact. It was found this housing market did not exhibit signs of an existing housing bubble. The outcomes from this research included policy implications for small island developing states located in the South Pacific.

The seventh paper from India investigated the framework required to provide affordable housing to the Economical Weaker Section (EWS) in this country. The enormity of this country’s housing affordability problem required an assessment of the criteria delaying the provision of affordable housing for EWS. In this research, the issues affecting levels of supply and demand for affordable housing in Indian urban areas for EWS are analysed. The methodology used judgement sampling involving housing and planning experts working in five varied housing sectors including local authorities, housing developers, housing sectors, town planning and housing consultants. Overall, the data was sourced from 349 questionnaires completed by housing experts in four states in India, where the questionnaires included criteria relating to housing affordability, and respondents ranked these criteria according to their perceived importance. The results were based on the examination of the ranking and importance of housing criteria where it was found there are possible developments for EWS in India. The eighth paper from China sought to compare the impact of bank credit on house prices located in first and second tier cities. It is accepted the level of housing prices has increased substantially in this country, partially due to the nature of and differences in real estate markets and the scale of bank credit in Chinese cities. The methodology used a panel data method to examine 19 first-tier cities and 30 second-tier cities between 2003 and 2018. The findings confirmed that bank credit was relevant to house prices; however, the effect varied in different cities. Furthermore, bank credit in second-tier cities tended to have a larger effect on house prices compared to markets in first tier cities. In contract, characteristics associated with population were found to be a dominant factor that influenced the level of house prices in first-tier cities. The variables of per capita and gross domestic product were found to be significantly related to the level of house prices in first- and second-tier cities.

The ninth paper from Australia modelled the residential construction production progress, including project commencement, under-construction and project completion, and how it responded dynamically to fluctuations in the level of house prices. The approach used a vector autoregressive model with an impulse response function applied to simulate and analyse the circle of the stage-responsiveness of residential construction to residential property price. The data was based on variables including the level of quarterly dwelling units commenced, units under-construction and completed units therefore being a proxy for the residential construction activities in the three stages during construction progress. The findings confirmed that dynamics are transmitted throughout the construction process and can substantially impact upon the pace of production progress. A simulated circle of the stage-responsiveness of residential construction to residential property price dynamics was proposed, which in turn can serve as a significant foundation for developing theory of construction production. The results could be applied in the development of price elasticity and production theories relevant in the context of residential property construction.

All nine papers have been through a rigorous double-blind refereeing process as well as conforming to the high quality of published research coupled with increased submission levels and a high rejection rate. I would like to take this opportunity to thank the international reviewers for their dedication and assisting the authors to publish their high-quality research. Authors are always welcome to engage with the editor prior to submission to discuss the suitability for this journal or other related aspects. 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 directly at ijhma@ijhma.com.