Determinants of Real Estate Bubbles in Thach That, Hanoi, Vietnam from 2017 to 2023

Abstract

This paper focuses on the determinants impacting the real estate bubbles in the suburban district of Thach That, Hanoi, Vietnam. Two models are used, including the RADF Test to identify the presence of the bubble in Thach That industrial region, center region, and high-tech park; and the OLS Regression to identify the factors influencing the bubbles; based on 76 observations showing monthly changes in residential land values from January 2017 to April 2023 and different independent variables’ data, such as gold price, Thach That population data, stock market indexes, trade balance, annual variation in the quantity of businesses, total investment cash flow into the market, and USD/VND rates for exchange and credit growth rates. Some conclusions are drawn from research results. Firstly, not all the regions throughout Thach That show the existence of real estate bubbles. Only the center region and new high-tech park experienced non-agricultural land price bubbles from 2019 to early 2022, while there are no bubbles in the industrial zone. Secondly, there are differences in factors concluded in the research compared to previous research. The research finds four factors affecting central landing prices and two affecting high-tech park prices. Also, a variable lag of one month affecting directly the bubbles in the high-tech park is due to qualitative investing psychological behaviors.