Forecasting Halifax Housing Market Trends
Dive into predicting and forecasting the Halifax housing market, exploring the impact of shelter costs, post-pandemic volatility, and trends like remote work migration. Discover key data collection methods, regression analysis models, and estimation strategies to project housing price trends in Halifax from 1990 to 2022. Evaluate estimation results and forecast accuracy using various models like ARDL, Artificial Neural Network, Random Forest, and K-nearest neighbor.
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Presentation Transcript
Predicting and Forecasting the Halifax Housing Market By: Dillan Jean Jacques djeanjacques@gardnerpinfold.ca
Shelter cost covers a high proportion of Canadian incomes High volatility of Halifax housing prices in post- pandemic era Background Work from home trend influencing an influx of persons from other provinces
A regression method for Real Estate Price Index Construction by Bailey et al. (1963) The efficiency of the market for single- family homes by Case and Shiller (1989) Practical Background Canadian City Housing Prices and Urban Market Segmentation by Allen et al. (2009)
Data Collection Teranet and National Bank of Canada Statistics Canada Database (Statscan) Canada Mortgage and Housing Corporation (CMHC) Standard & Poor s 500
125 variables divided into 4 categories Macroeconomic financial demographic socioeconomic Data
Housing price Trend from Jan 1990 Mar 2022 Halifax housing Index (Teranet) 300 250 200 150 100 50 0 Jul-90 Jul-93 Jul-96 Jul-99 Jul-02 Jul-05 Jul-08 Jul-11 Jul-14 Jul-17 Jul-20 Apr-91 Apr-94 Apr-97 Apr-00 Apr-03 Apr-06 Apr-09 Apr-12 Apr-15 Apr-18 Apr-21 Jan-92 Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10 Jan-13 Jan-16 Jan-19 Jan-22 Oct-92 Oct-95 Oct-98 Oct-01 Oct-04 Oct-07 Oct-10 Oct-13 Oct-16 Oct-19
Estimation Strategies Elastic Net Regularization Dynamic Autoregressive distributed lag Model (ARDL) Newey West HAC estimation (Residual Diagnostics)
Estimation Results
FORECAST EVALUATION Model RMSFE RMAFE Historical-mean model 0.015 0.108 ARDL Estimated by Elastic net 0.002 0.039 Artificial Neural Network Model 0.215 0.461 Random Forest 0.016 0.109 K-nearest neighbour Model 0.015 0.108
Takeway Larger Canadian real estate markets may have ripple effects on Halifax housing market Inter-provincial migration plays a key role Fall in the growth rate of housing prices in 2nd quarter of 2022
End of Presentation Thank you
