Crashes in real estate prices: causes and predictability

Qin Xiao

    Research output: Contribution to journalArticlepeer-review

    17 Citations (Scopus)


    Large swings in real estate prices that end in devastating crashes have been witnessed by many countries in the past two decades. To curtail the damage of these crashes, it is imperative that we understand their causes. This study proposes a model that associates market crashes with periodically collapsing speculative bubbles. Unlike the conventional literature, the identification of the bubble does not rely on assumptions about fundamentals, but on some “fingerprints” of speculation. These fingerprints, theoretically, may also serve as predictors of market crashes. In practice, however, a number of factors may hinder the accuracy of the prediction.
    Original languageEnglish
    Pages (from-to)1725-1744
    Number of pages20
    JournalUrban Studies
    Issue number8
    Early online date11 Mar 2010
    Publication statusPublished - Jul 2010


    • market crash
    • speculative bubble
    • HSGT
    • property markets


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