Le Ma

The decomposition of housing market variations : a panel data approach

Purpose - This paper develops a new decomposition method of the housing market variations to analyse the housing dynamics of the Australian eight capital cities. Design/methodology/approach - This study reviews the prior research on analysing the housing market variations and classifies the previous methods into four main models. Based on this, the study develops a new decomposition of the variations, which is made up of regional information, home-market information and time information. The panel data regression method, unit root test and Findings - This paper suggests that the Australian home-market information has the same elasticity to the housing market variations across cities and time. In contrast, the elasticities of the regional information are distinguished. However, similarities exit in the west and north of Australia or the south and east of Australia. The time information contributes differently along the observing period, although the similarities are found in certain periods. Originality/value - This paper introduces the housing market variation decomposition into the research of housing market variations and develops a model based on the new method of the housing market variation decomposition.

An interdependence analysis of Australian house prices using variance decomposition

Purpose - The purpose of this paper is to analyse the interdependencies of the house price growth rates in Australian capital cities. Design/methodology/approach - A vector autoregression model and variance decomposition are introduced to estimate and interpret the interdependences among the growth rates of regional house prices in Australia. Findings - The results suggest the eight capital cities can be divided into three groups: Sydney and Melbourne; Canberra, Adelaide and Brisbane; and Hobart, Perth and Darwin. Originality/value - Based on the structural vector autoregression model, this research develops an innovative interdependence analysis approach of regional house prices based on a variance decomposition method.

Spatio-temporal analysis of house price convergence based on a demographical distance

Convergences of house prices have been studied for over three decades, but yet have been confirmed because of spatial heterogeneity and autocorrelations in house prices. A spatio-temporal approach was recently proposed to address the spatial and temporal issues related to house prices. However, most previous studies placed the focus on the spatial heterogeneity and autocorrelations from geographical locations, which neglected other spatial factors. In order to overcome this shortfall, this research argued a demographical distance, constructed by demographical structure and housing market scales, to investigate the house price convergences in Australian capital cities. The results confirmed the house price levels in Canberra, Brisbane and Perth converged to the house price level in Sydney.

Did the late-2000s financial crisis influence construction labour productivity?

The late-2000s global financial crisis has wrought dramatic impacts on the construction industry. However, the issue of whether the crisis influenced the behaviours of the construction industry has not been addressed yet. This research presents an econometric approach to investigating the effects of the recent global financial crisis on construction labour productivity. By employing the error correction model and panel regression methods, the direct and indirect effects of the financial crisis on the changes in Australian construction labour productivity are explored at national and state levels. Neither the direct nor the indirect effects appear statistically significant. The results indicate that the direct effect of the financial crisis drives up construction labour productivity at the national level, while the indirect effect diminishes productivity. The effects of the financial crisis on the state construction labour productivity vary from state to state. The financial crisis influenced construction labour productivity directly and significantly in the northern and eastern regions, while the direct effects appear not significant in the other states and territories. The indirect effects of the financial crisis on productivity are statistically significant in three regions: the Australian Capital Territory, the Northern Territory and Western Australia. By comparison, the model with the financial effects fails to provide more accurate simulating results. As such, this research concludes that the influence of the late-2000s financial crisis on Australian national and state construction labour productivity is limited.

Construction labor productivity convergence: a conditional frontier approach

Purpose – Understanding and simulating construction activities is a vital issue from a macro-perspective, since construction is an important contributor in economic development. Although the construction labor productivity frontier has attracted much research effort, the temporal and regional characteristics have not yet been explored. The purpose of this paper is to investigate the long-run equilibrium and dynamics within construction development under a conditional frontier context. Design/methodology/approach – Analogous to the simplified production function, this research adopts the conditional frontier theory to investigate the convergence of construction labor productivity across regions and over time. Error correction models are implemented to identify the long-run equilibrium and dynamics of construction labor productivity against three types of convergence hypotheses, while a panel regression method is used to capture the regional heterogeneity. The developed models are applied to investigate and simulate the construction labor productivity in the Australian states and territories. Findings – The results suggest that construction labor productivity in Australia should converge to stable frontiers in a long-run perspective. The dynamics of the productivity are mainly caused by the technology utilization efficiency levels of the local construction industry, while the influences of changes in technology level and capital depending appear limited. Five regional clusters of the Australian construction labor productivity are suggested by the simulation results, including New South Wales; Australian Capital Territory; Northern Territory, Queensland, and Western Australia; South Australia; and Tasmania and Victoria. Originality/value – Three types of frontier of construction labor productivity is proposed. An econometric approach is developed to identify the convergence frontier of construction labor productivity across regions over time. The specified model can provides accurate predictions of the construction labor productivity.

Ripple effects of house prices: considering spatial correlations in geography and demography

Purpose – Studies into ripple effects have previously focused on the interconnections between house price movements across cities over space and time. These interconnections were widely investigated in previous research using vector autoregression models. However, the effects generated from spatial information could not be captured by conventional vector autoregression models. This research aimed to incorporate spatial lags into a vector autoregression model to illustrate spatial‐temporal interconnections between house price movements across the Australian capital cities.Design/methodology/approach – Geographic and demographic correlations were captured by assessing geographic distances and demographic structures between each pair of cities, respectively. Development scales of the housing market were also used to adjust spatial weights. Impulse response functions based on the estimated SpVAR model were further carried out to illustrate the ripple effects.Findings – The results confirmed spatial correlatio...

A panel error correction approach to explore spatial correlation patterns of the dominant housing market in Australian capital cities

Purpose - – A panel error correction model has been developed to investigate the spatial correlation patterns among house prices. This paper aims to identify a dominant housing market in the ripple down process. Design/methodology/approach - – Seemingly unrelated regression estimators are adapted to deal with the contemporary correlations and heterogeneity across cities. Impulse response functions are subsequently implemented to simulate the spatial correlation patterns. The newly developed approach is then applied to the Australian capital city house price indices. Findings - – The results suggest that Melbourne should be recognised as the dominant housing market. Four levels were classified within the Australian house price interconnections, namely: Melbourne; Adelaide, Canberra, Perth and Sydney; Brisbane and Hobart; and Darwin. Originality/value - – This research develops a panel regression framework in addressing the spatial correlation patterns of house prices across cities. The ripple-down process of house price dynamics across cities was explored by capturing both the contemporary correlations and heterogeneity, and by identifying the dominant housing market.

DO SPATIAL EFFECTS DRIVE HOUSE PRICES AWAY FROM THE LONG-RUN EQUILIBRIUM?

Abstract Long-run equilibrium of house prices has been investigated by researchers in multiple countries. The identification of this equilibrium not only provides references against contemporary house price levels, but also contributes to creation of stable-development policies and healthy investment strategies. However, there is little research investigating the factors that drive house prices away from the long-run equilibrium. Based on a framework of the conventional stationarity test process, this research develops a panel regression model and a spatial regression model to investigate the roles of spatial heterogeneity and correlations on house prices preceding the long-run equilibrium, respectively. Housing data generated from the capital cities in Australia are used to illustrate the models. Spatial effects can have a strong influence in the long-run performance of house prices, while the short-run performance of house prices is not influenced by the spatial effects.

Decomposition of temporal changes in construction labour productivity

ABSTRACT Construction productivity is recognized as an indicator reflecting the performance efficiency and competitiveness of the industry. A large amount of research has been carried out focusing on the decomposition of the influential factors and the temporal trends of construction productivity changes, respectively. However, the decomposition of the temporal changes in construction labour productivity has not yet been explored. Analogous to the framework of the productivity frontier, this research argues for a four-component decomposition of the temporal changes in construction labour productivity, including technology, technology-utilization efficiency, the capital-labour ratio and production capacity. An error correction model is subsequently estimated using the panel data regression method to investigate the effects of these components on the temporal changes in construction productivity across a sample of the Australian construction industry. The empirical results con?rm that the effects of the four components on the temporal changes in construction productivity changes vary over the observed time periods. From the aggregate level, the technology-utilization efficiency and capital-labour ratio across the regions are found to be barriers to growth in Australian construction productivity. Nevertheless, the effects of technology-utilization efficiency and production capacity varied significantly over the three sub-periods, when innovative national economic systems were introduced.

A market-oriented model for the independent-living retirement village industry

Purpose As the “baby boomer” generation continues to enter their senior post-retirement years, the provision of affordable retirement housing has become increasingly important for the community, practitioners and policymakers. However, relatively little attention has to date been placed on identifying an effective market mechanism for the industry of the independent-living retirement villages to meet this increased and unprecedented demand. This study aims to develop an innovative and affordable retirement village development model which meets the needs of all stakeholders including seniors, retirement village residents, the retirement village industry and government. Design/methodology/approach The attributes of this study are as follows: structure of individual living units, retirement village characteristics, retirement village facilities and services and support mechanisms. The analysis was undertaken based on data relating to independent-living retirement villages in five Australian states. A hedonic pricing model was used where the price distributions relating to these four aspects were estimated. Findings The results confirmed the structures of the independent living units and the retirement village characteristics were closely related to pricing, followed by services and supports with a lesser relationship, although the facilities were not significantly related to pricing. Research limitations/implications This research is not able to address the entire retirement village market in Australia because the available market data are limited. Practical implications This research uses an innovative supply-side approach to assess retirement village attributes and values, which provides stakeholders with up-to-date market information to assist in guiding the performance of the retirement village industry. Social implications The market evaluations imply that seniors are reluctant to pay for village attributes that are not regarded as highly sought-after. A cost-effective strategy of new retirement village developments and upgrades can be further induced, which in turn can enhance the market efficiency and affordability of the retirement villages. Originality/value This pricing model for retirement village units extends previous studies into retirement villages and presents stakeholders with an innovative and reliable market-oriented model.