Towards a Typology of Housing Price Bubbles: A Literature Review

ABSTRACT

The article presents a detailed review of the literature relating to speculative price bubbles on the real estate market, in particular the typology of speculative price bubbles. The aim of the study was to synthesize the knowledge on different types of price bubbles in the international literature. A typology of price bubbles was proposed based on functional and structural criteria that account for the structure of price bubbles and the real estate market. The research methods involved critical analysis and a review of the literature with a commentary. The study proposes a novel typology of price bubbles and defines the concept of a “conversion point” which is associated with changes in the group of factors that lead to the formation of price bubbles and changes in bubble type.

KEYWORDS:

• Housing bubble
• typology
• conversion point

Acknowledgments

The author would like to thank three anonymous Reviewers for valuable comments concerning the structure of the manuscript, its content, in-text citations and mathematical formulas. Their contribution has significantly improved the quality of the paper.

All errors should be attributed to the author.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. The study was published in Polish; therefore, it is not cited directly in this article.

2. Rational decision-making on the market, and rational, quasi-rational and irrational price bubbles are discussed in subsequent parts of the article. The analysis relies on the traditional concept of rationality that makes a reference to the rational expectations theory.