Prediction of Housing Demand with the Model of Household Formation

The wrong and inappropriate intervention will lead to the distortion of housing market, the outcome of supply and demand, and the unexpected failure on housing program and policy ultimately. Consequently, proper as well as practical prediction on housing demand is one of the most important objects in this study.

Headship rate method, the very technique in this study, will be used to establish the forecasted model on “household formation and dissolution” and in the further to predict the quantity of housing demanded. The related studies on housing demand, in Taiwan, almost devoted themselves into microeconomic behavior and the discussion on the level solved of housing services. Few of the studies, from the macroeconomic point of view, set up the “household formation and dissolution” model to predict the demanded quantity of ”dwelling unit” as well as the market quantity of housing demanded.