Catch Animal Spirits in Auction: Evidence from New Zealand Property Market

Shi, S; Kabir, MH

Catch Animal Spirits in Auction: Evidence from New Zealand Property Market

Shi, S

Kabir, MH

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Publication Type:: Journal Article
Citation:: Real Estate Economics, 2018, 46 (1), pp. 59 - 84
Issue Date:: 2018-03-01

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Field	Value	Language
dc.contributor.author	Shi, S https://orcid.org/0000-0003-4188-5151	en_US
dc.contributor.author	Kabir, MH	en_US
dc.date.issued	2018-03-01	en_US
dc.identifier.citation	Real Estate Economics, 2018, 46 (1), pp. 59 - 84	en_US
dc.identifier.issn	1080-8620	en_US
dc.identifier.uri	http://hdl.handle.net/10453/121878
dc.description.abstract	© 2017 American Real Estate and Urban Economics Association Following the animal spirits theory proposed by Akerlof and Shiller, this article contributes to behavior economics by investigating the possibility of using auction sales data to capture evidence of irrational exuberance in the housing market. Using the monthly percentages of residential property auction sales for Auckland, Wellington and Christchurch regions in New Zealand from 2006 to 2015, and the exuberance testing method proposed by Phillips, Shi and Yu, we find that animal spirits have been developing in the Auckland housing market since 2013, but not in other regions. When compared to the results based on price-to-rent ratios, auction sales provide more meaningful results for identifying market-wide irrational exuberance at an early stage. The causality test on price-to-rent ratios and auction sales volume shows that asset prices and animal spirits influence each other in the short run. In the long run, prices have significant effect on animal spirits, but not vice versa.	en_US
dc.relation.ispartof	Real Estate Economics	en_US
dc.relation.isbasedon	10.1111/1540-6229.12206	en_US
dc.subject.classification	Finance	en_US
dc.title	Catch Animal Spirits in Auction: Evidence from New Zealand Property Market	en_US
dc.type	Journal Article
utslib.citation.volume	1	en_US
utslib.citation.volume	46	en_US
utslib.for	1205 Urban and Regional Planning	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Design, Architecture and Building
pubs.organisational-group	/University of Technology Sydney/Faculty of Design, Architecture and Building/School of Built Environment
utslib.copyright.status	closed_access
pubs.issue	1	en_US
pubs.publication-status	Published	en_US
pubs.volume	46	en_US

Abstract:

© 2017 American Real Estate and Urban Economics Association Following the animal spirits theory proposed by Akerlof and Shiller, this article contributes to behavior economics by investigating the possibility of using auction sales data to capture evidence of irrational exuberance in the housing market. Using the monthly percentages of residential property auction sales for Auckland, Wellington and Christchurch regions in New Zealand from 2006 to 2015, and the exuberance testing method proposed by Phillips, Shi and Yu, we find that animal spirits have been developing in the Auckland housing market since 2013, but not in other regions. When compared to the results based on price-to-rent ratios, auction sales provide more meaningful results for identifying market-wide irrational exuberance at an early stage. The causality test on price-to-rent ratios and auction sales volume shows that asset prices and animal spirits influence each other in the short run. In the long run, prices have significant effect on animal spirits, but not vice versa.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/121878