House Price Indices Prediction By ARIMA, ETS And ARIMA-Xreg
DOI:
https://doi.org/10.54097/b7sqzb85Keywords:
ARIMA; ETS; House Price; UK.Abstract
Residential Property Prices Indices (RPPIs) of United Kingdom is important for policymakers, businesses, investors and individuals because it helps research on the UK's economic direction, develop effective government policies, and guide financial decisions. But there is a lack of papers related to prediction of this factor. Thus, this paper aims to find a model which accurately and comprehensively forecasts RPPI of United Kingdom. This study employs quarterly data of RPPIs for United Kingdom spanning from the first quarter of 1970 to the second quarter of 2025, which has been seasonally adjusted. ARIMA, ARIMA with external regressors (ARIMA with xreg), and ETS are employed in this study for modelling forecasting of RPPI of United Kingdom. By comparing overall MAE and overall RMSE, ETS outperforms both ARIMA and ARIMA with xreg. This study provides important references for investors, policymakers, and individuals to select appropriate forecasting models for predicting housing prices for their specific purpose, like investment.
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