A Study on Spatial Dependence of Housing Prices and Housing Submarkets in Tainan Metropolis, Taiwan

This study applies different methods including statistical and spatial analysis techniques to delineate spatial submarkets of housing prices and to examine spatial dependence of housing prices. The data comes from housing transaction prices in Tainan Metropolis, 2009. The Tainan Metropolis is a new metropolis amalgamated from former Tainan City and Tainan County. Due to the amalgamation of municipalities, local government boundaries will be adjusted, and in the mean time, it is worthy to identify spatial submarkets of housing prices in the metropolitan area, compared to predefined local government boundary submarkets. It was found that higher housing prices are concentrated in the inner city area while lower prices spread widely around outer ring of the inner city area of Tainan Metropolis.

In testing spatial autocorrelation of housing prices, it was found that a significant spatial dependence was occurred among housing prices. In modeling housing prices, the results show that spatial submarkets derived by spatial autocorrelation techniques have stronger and more significant impacts on housing prices, and the model also have better goodness-of-fit compared to two alternative models. The spatial techniques would be appropriate approaches to classify spatial submarkets of housing prices especially in metropolitan areas.

Bor-Ming Hsieh