The Study of Effective Factors of Share Determination in Housing Price Bubble in Iran

In this paper we aims to answer: to what extent can monetary policy variables and other economic indicators predict the changes in housing price bubble. Therefore, we use VAR model with quarterly data from (1371-1386) for Iran. Our results represent the formation of bubble, differ from booms and busts cycles. House price bubbles seem to be equally sensitive to a positive shocks in liquidity and construction cost and they are sensitive to a negative shocks in exchang rate and interest rate and stock price index. The effect of monetary policy is the most important and effective variables on house bubble. Effect of construction cost in (1374-1377) cycles is more than other cycles. Effect of stock price index in (1383-1386) cycles are more than other cycles. Our results indicate that monetary authority should tighten when house price bubble are inflating and should ease when house price bubble collapse.