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An examination of house price bubble in the real estate sector: the case of a small island economy – Fiji

Mohsin Khan (School of Land Management and Development, University of the South Pacific, Suva, Fiji)
Rup Singh (School of Economics, Faculty of Business and Economics, University of the South Pacific, Suva, Fiji)
Arvind Patel (Department of Accounting and Finance, Faculty of Business and Economics, University of the South Pacific, Suva, Fiji)
Devendra Kumar Jain (Department of Accounting and Finance, Faculty of Business and Economics, University of the South Pacific, Suva, Fiji and Department of Finance, Westminster International University in Tashkent, Tashkent, Uzbekistan)

International Journal of Housing Markets and Analysis

ISSN: 1753-8270

Article publication date: 25 February 2021

Issue publication date: 23 July 2021

395

Abstract

Purpose

This paper aims to assess the equilibrium house price in the city of Suva (Fiji) and to analyse the house price bubble in the Fiji housing market.

Design/methodology/approach

This paper adopts a time series approach to determine the presence of house price bubbles in Fiji over the period from 1988 to 2018.

Findings

The findings suggest that real income, land cost, building material price, inflation rate, volatility, household size and wealth have a positive impact on house prices, whereas user cost of capital and political disturbances have a negative impact. The findings further indicate that the Fijis’ housing market does not constitute any house price bubble.

Practical implications

This paper draws policy implications for a small developing state (Fiji) and other similar economies.

Originality/value

The price bubble in the Fiji housing market is analysed for the first time. This paper develops a comprehensive empirical approach to assess the equilibrium-housing price in Fiji.

Keywords

Acknowledgements

The authors acknowledge the funding support for this research by the University of the South Pacific (Research Office).

Citation

Khan, M., Singh, R., Patel, A. and Jain, D.K. (2021), "An examination of house price bubble in the real estate sector: the case of a small island economy – Fiji", International Journal of Housing Markets and Analysis, Vol. 14 No. 4, pp. 745-758. https://doi.org/10.1108/IJHMA-05-2020-0056

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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