Estimate the housing bubble in Iran with the Error Correction approach

Over the past two decades، changes in the structure of the housing market، especially growth of speculation demand lead to the formation of the housing bubble. The objective of this article is to estimate the housing bubble in Iran. For this purpose، the fundamental house prices were estimated and the bubble is obtained as difference between the fundamental and actual house prices. Considering the rationing in the mortgage market of Iran، the equation of real house prices given the unequilibrium in the housing credit market was used. Housing bubble makes adjustments to slow and lag variables have a crucial role. So the dynamic form of real house prices equation was used. The results obtained from the estimation of real house prices equation point to the presence of bubble in the housing market of Iran. In fact، we have been observing the burst of housing bubble in the housing market of Iran in 1375، 1381 and 1386.