The natural vacancy rate: An alternative rental apartment market indicator.

摘要

The balanced market vacancy rate is a market indicator utilized by housing analysts to determine one aspect of the private rental apartment market. The act of comparing the observed vacancy rate to the balanced rate supposedly reveals to what degree a market is over- or under-supplied. However, the balanced market vacancy rate is assumed to have the same value for all cities, regardless of market, demographic or legislative factors. An alternative market indicator is the natural vacancy rate as defined by Rosen and Smith (1983). The natural vacancy rate is a rate at which change in real rents is zero. It is assumed that factors such as government regulations have, over time, affected the market. This suggests that the natural vacancy rate is preferable to the balanced market vacancy rate as a market indicator because it considers various socio-economic and demographic variables.;A pooled data linear regression analysis was used to evaluate the usefulness of the natural vacancy rate model as a market indicator. Additionally, the components or determinants of the natural vacancy rate were examined using a multiple regression. This study found that a functional relationship existed between the percent change in rent and difference between the observed vacancy rate and the natural vacancy rate. The relationship between the components of the natural vacancy rate and the level of the natural vacancy rate was uncertain. Though the correlation coefficient indicated a strong and direct relationship, caution should be used in interpreting the regression statistics since the sample size was small.