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Forecasting future trends in Dubai housing market by using Box‐Jenkins autoregressive integrated moving average

Ali Hepşen (Department of Finance, Faculty of Business Administration, Istanbul University, Istanbul, Turkey)
Metin Vatansever (Department of Mathematics and Statistics, Faculty of Arts and Science, Yıldız Technical University, Istanbul, Turkey)

International Journal of Housing Markets and Analysis

ISSN: 1753-8270

Article publication date: 9 August 2011

Abstract

Purpose

It is important to forecast index series to identify future rises, falls, and turning points in the property market. From the point of this necessity and importance, the main purpose of this paper is to forecast the future trends in Dubai housing market.

Design/methodology/approach

This paper uses the monthly time series of Reidin.com Dubai Residential Property Price Index (DRPPI) data. In order to forecast the future trends in Dubai housing market, Box‐Jenkins autoregressive integrated moving average (ARIMA) forecasting method is utilized.

Findings

The results of the ARIMA modeling clearly indicate that average monthly percentage increase in the Reidin.com DRPPI will be 0.23 percent during the period January 2011‐December 2011. That is a 2.44 percent increase in the index for the same period.

Practical implications

Reidin.com residential property price index is a crucial tool to measure Dubai's real estate market. Based on the current index values or past trend, real estate investors (i.e. developers and constructors) decide to start new projects. Attempts have also been made in the past to forecast index series to identify future rises, falls, and turning points in the property market. The results of this paper would also help government and property investors for creating more effective property management strategies in Dubai.

Originality/value

There is no previous study analyzing the future trends in Dubai housing market. At this point, the paper is the first academic study that identifies this relationship.

Keywords

Citation

Hepşen, A. and Vatansever, M. (2011), "Forecasting future trends in Dubai housing market by using Box‐Jenkins autoregressive integrated moving average", International Journal of Housing Markets and Analysis, Vol. 4 No. 3, pp. 210-223. https://doi.org/10.1108/17538271111153004

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited