Speculative Behaviour in Immature Real Estate Markets, Lessons of the 1997 Asia Financial Crisis

This article investigates speculative behaviour and focuses on developer and banker behaviour in Asian real estate markets at the time of the 1997 Asia financial crisis. Over-optimism and over-investment are exacerbated when the financial infrastructure is incomplete and real estate markets are immature. The article identifies improvements in the real estate market infrastructure needed to lower the amplitude and cost of future episodes of volatility.