A long short-term memory model for forecasting housing prices in Taiwan in the post-epidemic era through big data analytics

• Published in: Asia Pacific management review 2024-09, Vol.29 (3), p.273-283
• Main Author: Chiu, Kuei-Chen
• Format: Article
• Language: English
• Subjects: Big data analytics; Forecasting models; Housing market; Housing prices; Long short-term memory (LSTM); Regression analysis
• ISSN: 1029-3132
• DOI: 10.1016/j.apmrv.2023.08.002

This study aims to analyse housing prices in Taiwan in the post-epidemic era, identify the crucial factors influencing them, and develop a suitable method for analysing and forecasting them. This study collects relevant data such as Taiwan's housing price index data from 2002 to 2020 to identify the crucial factors affecting Taiwan's housing prices; this is achieved by constructing a regression model, forecasting Taiwan's housing prices through a constructed long short-term memory (LSTM) model that employs big data analytics, and verifying the efficiency of the proposed models through R-square and root mean square error values. The results indicate that the top 10 factors affecting Taiwan's housing prices are mostly related to mortgage interest rates, suggesting that in Taiwan, the effect on housing prices in the post-epidemic era may be non-significant. This study collects data on Taiwan's housing price for the period from the first quarter of 2002 to the fourth quarter of 2020 to construct an LSTM for forecasting Taiwan's housing prices. The results indicate that the proposed LSTM exhibits good fitness, indicating that the model is suitable for analysing and forecasting housing prices. Given that analysing and forecasting quantity is also crucial in housing market analyses and that this study focuses only on predicting housing prices, future research should explore the simultaneous prediction and analysis of both price and quantity.