Source
doi:10.3390/su11092482 — original publication (opens in a new tab; the file is not redistributed)
Summary
Zhao, Mbachu & Liu (2019) apply ARIMA, multiple linear regression (MLR), and artificial neural network (ANN) models to quarterly NZ house price index data (1989: Q4–2018: Q4, sourced from Stats NZ and RBNZ) to identify the best forecasting technique and the structural drivers of housing price growth. ARIMA(1,1,0) outperforms the other two models in out-of-sample forecasting (MAPE 7.54% vs 10.16% vs 12.89%). The MLR model identifies four statistically significant macro-economic drivers: employment and population growth (positive), CO₂ emissions (positive, as proxy for development activity), and mortgage rate (negative). The paper frames housing price monitoring as a sustainability indicator for urban policy.
Key thesis insights
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NZ housing demand is structurally driven, not cyclical — ARIMA(1,1,0) best fit indicates NZ house prices follow a non-stationary stochastic growth pattern; the upward trend from 1989–2018 is persistent. The MLR R²=0.982 with four macro-economic predictors confirms that price growth is structurally embedded in employment, population, and development activity — not a speculative anomaly. Supports the thesis argument that housing unaffordability is a structural push factor motivating demand for alternative community models. LIT_028
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Four structural drivers of NZ housing demand — Employment growth, population increase, and development activity (CO₂ proxy) drive house prices up; higher mortgage rates suppress demand. Employment-linked mobility and population pressure co-exist with affordability constraints from high mortgage rates — creating conditions where community land trust or cohousing models that decouple housing cost from the speculative market could attract demand. LIT_028
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Auckland housing shortfall as demand signal — Auckland faced a 20,000–30,000 unit shortfall with an annual need of ~13,000 new dwellings at time of study (citing 2013 Auckland Housing Accord; figure is now outdated but directionally consistent with ongoing undersupply). The structural undersupply of conventional housing is the demand-side context within which alternative community models — including intentional communities with self-sufficient design — operate. LIT_028
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Housing price growth as a sustainability problem — The paper explicitly links house price inflation to unsustainability: stretched valuations increase household indebtedness, decrease wealth and consumption capacity, and represent resource misallocation in the construction sector. This framing supports the thesis argument that the conventional housing market fails on financial sustainability grounds, creating systemic motivation for alternative models. LIT_028
Connections
Referenced by
Sources (1): OT_130