House Age, Price and Rent: Implications from Land-Structure Decomposition
Big cities often witness land price outgrowing structure price. For such cities this paper derives two predictions regarding the dynamics between house prices, rent and structure age. First, older houses have a higher price growth rate than younger ones, even after controlling for location and other...
| Main Authors: | , , , |
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| Other Authors: | |
| Format: | Article |
| Language: | English |
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Springer US
2018
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| Online Access: | http://hdl.handle.net/1721.1/115554 |
| _version_ | 1811095009954365440 |
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| author | Xu, Yangfei Zhang, Qinghua Zheng, Siqi Zhu, Guozhong |
| author2 | Massachusetts Institute of Technology. Center for Real Estate |
| author_facet | Massachusetts Institute of Technology. Center for Real Estate Xu, Yangfei Zhang, Qinghua Zheng, Siqi Zhu, Guozhong |
| author_sort | Xu, Yangfei |
| collection | MIT |
| description | Big cities often witness land price outgrowing structure price. For such cities this paper derives two predictions regarding the dynamics between house prices, rent and structure age. First, older houses have a higher price growth rate than younger ones, even after controlling for location and other attributes; second, the age depreciation of house price, defined as the decline of house price with respect to house age, is slower than the similarly-defined age depreciation of rent. These hypotheses are supported by the micro-data on housing market in Beijing. These two inferences have implications for both real estate valuation and house price index construction. Keywords: Land price, Structure price, House prices, Rent, Depreciation |
| first_indexed | 2024-09-23T16:09:05Z |
| format | Article |
| id | mit-1721.1/115554 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T16:09:05Z |
| publishDate | 2018 |
| publisher | Springer US |
| record_format | dspace |
| spelling | mit-1721.1/1155542022-10-02T06:41:34Z House Age, Price and Rent: Implications from Land-Structure Decomposition Xu, Yangfei Zhang, Qinghua Zheng, Siqi Zhu, Guozhong Massachusetts Institute of Technology. Center for Real Estate Massachusetts Institute of Technology. Department of Urban Studies and Planning Zheng, Siqi Big cities often witness land price outgrowing structure price. For such cities this paper derives two predictions regarding the dynamics between house prices, rent and structure age. First, older houses have a higher price growth rate than younger ones, even after controlling for location and other attributes; second, the age depreciation of house price, defined as the decline of house price with respect to house age, is slower than the similarly-defined age depreciation of rent. These hypotheses are supported by the micro-data on housing market in Beijing. These two inferences have implications for both real estate valuation and house price index construction. Keywords: Land price, Structure price, House prices, Rent, Depreciation National Natural Science Foundation (China) (71625004) National Natural Science Foundation (China) (71273154) National Natural Science Foundation (China) (71322307) National Natural Science Foundation (China) (71533004) China. Ministry of Science and Technology. National Key Technologies R&D Program (2016YFC0502804) 2018-05-22T14:31:01Z 2018-05-22T14:31:01Z 2017-02 2018-01-20T05:11:58Z Article http://purl.org/eprint/type/JournalArticle 0895-5638 1573-045X http://hdl.handle.net/1721.1/115554 Xu, Yangfei, et al. “House Age, Price and Rent: Implications from Land-Structure Decomposition.” The Journal of Real Estate Finance and Economics, vol. 56, no. 2, Feb. 2018, pp. 303–24. en http://dx.doi.org/10.1007/s11146-016-9596-6 The Journal of Real Estate Finance and Economics Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/ Springer Science+Business Media New York application/pdf Springer US Springer US |
| spellingShingle | Xu, Yangfei Zhang, Qinghua Zheng, Siqi Zhu, Guozhong House Age, Price and Rent: Implications from Land-Structure Decomposition |
| title | House Age, Price and Rent: Implications from Land-Structure Decomposition |
| title_full | House Age, Price and Rent: Implications from Land-Structure Decomposition |
| title_fullStr | House Age, Price and Rent: Implications from Land-Structure Decomposition |
| title_full_unstemmed | House Age, Price and Rent: Implications from Land-Structure Decomposition |
| title_short | House Age, Price and Rent: Implications from Land-Structure Decomposition |
| title_sort | house age price and rent implications from land structure decomposition |
| url | http://hdl.handle.net/1721.1/115554 |
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