Abstract for: System Dynamic Approach for Analyzing Cyclic Mechanism in Land Market and Their Effect on House Market Fluctuations

In this article we have developed a simple dynamic model to portray a cyclic producing mechanism in land market and in the following we have probed the effect of land market oscillation on house market price, which has not been addressed before. In this model, in the beginning two cyclic producing mechanisms in land market are introduced and their effect on house market is elaborated in detail. As we combine the land market model with house market model, to develop an integrated model that offers better understandings of house market trends. The model showed that, in contrast to common perception which presumes house market fluctuations(in supply sector)to be totally intrinsic,they are mainly due to cyclic producing mechanism in land market. Our work uncovers the rich dynamic complexity of the real estate system and can serve as a good example of applying systems thinking principles to complex real world problems. Moreover, we have taken advantage of classic mass-spring systems, to model the house and land market and thus a simple powerful tool is introduced to predict the effect of various mechanisms affecting the house market (e.g. capital market)and it can be a great help to understand the complex house market system, in more depth.