Journal
BUILDING AND ENVIRONMENT
Volume 43, Issue 6, Pages 1171-1184Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.buildenv.2007.02.017
Keywords
forecasting; housing; demand; supply; private sector; models; genetic algorithm
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An accurate prediction of prospective construction supply and demand, especially the private residential market, is paramount important to policy makers, as it could help formulate strategies to cultivate/stabilize the economy and satisfy the social needs (at macro level). Despite that, a realistic prediction of future private residential demand is never an easy task, as it is governed by a number of social and economic factors. In this paper, four leading indicator models are developed and compared for directly forecasting Hong Kong private sector residential demand. These comprise a (i) Linear Regression Analysis (LRA) model, (ii) Genetic Algorithms (GA) model, (iii) GA-LRA model, where LRA is used to select the indicator variables; and (iv) GA-LRA model with Adaptive Mutation Rate (AMR) to reduce the likelihood of local optima. The findings indicate that the GA-LRA model with AMR provides the most accurate forecasts and over a longer time horizon. In providing a range of possible forecasts, the model also provides an opportunity for the decision-maker to exercise judgment in selecting the most appropriate forecasts. (C) 2007 Elsevier Ltd. All rights reserved.
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