Please use this identifier to cite or link to this item: https://www.um.edu.mt/library/oar/handle/123456789/33773
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dc.contributor.authorMicallef, Brian-
dc.date.accessioned2018-09-14T09:02:11Z-
dc.date.available2018-09-14T09:02:11Z-
dc.date.issued2018-
dc.identifier.citationMicallef, B. (2018). Constructing an index to examine house price misalignment with fundamentals in Malta. International Journal of Housing Markets and Analysis, 11(2), 315-334.en_GB
dc.identifier.urihttps://www.um.edu.mt/library/oar//handle/123456789/33773-
dc.description.abstractThis paper computes an aggregate misalignment index using a multiple indicator approach to identify under or over-valuation of house prices in Malta based on fundamentals. A total of 6 indicators are used that capture households, investors and system-wide factors: the house price-to-RPI ratio, the price-to-hypothetical borrowing volume ratio, price-to-construction costs ratio, price-to-rent ratio, dwelling investment-to-GDP ratio and the loan bearing capacity. These sub-indices enter the index in gap form and the weights are derived using principal component analysis. The analysis is performed using both the house price indices of the National Statistics Office (NSO) and the Central Bank of Malta (CBM), which are based on contract and advertised prices, respectively. House prices in Malta were overvalued by around 20% to 25% in the pre-crisis boom. This disequilibrium started to be corrected following the decline in house prices, with the CBM and NSO house price indices reaching a trough in 2013 and 2014, respectively. Since then, house prices started to recover although the recovery in the advertised price index was more pronounced compared to that based on contract prices. In mid-2017, advertised house prices were slightly overvalued while contract prices still have to reach their equilibrium level. The dynamics from the misalignment index, including its peaks and troughs, are remarkably similar to the range derived from statistical filters.en_GB
dc.language.isoenen_GB
dc.publisherEmeralden_GB
dc.rightsinfo:eu-repo/semantics/restrictedAccessen_GB
dc.subjectHousing -- Prices -- Maltaen_GB
dc.subjectHousing -- Malta -- Costsen_GB
dc.subjectHousing -- Supply and demanden_GB
dc.subjectHousing -- Price indexesen_GB
dc.titleConstructing an index to examine house price misalignment with fundamentals in Maltaen_GB
dc.typearticleen_GB
dc.rights.holderThe copyright of this work belongs to the author(s)/publisher. The rights of this work are as defined by the appropriate Copyright Legislation or as modified by any successive legislation. Users may access this work and can make use of the information contained in accordance with the Copyright Legislation provided that the author must be properly acknowledged. Further distribution or reproduction in any format is prohibited without the prior permission of the copyright holder.en_GB
dc.description.reviewedpeer-revieweden_GB
dc.identifier.doi10.1108/IJHMA-11-2017-0099-
dc.publication.titleInternational Journal of Housing Markets and Analysisen_GB
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