ID111-GCREC2011_Fullpaper_EMD_final.pdfVIP

1 A Novel Approach to Study House Rent Price Index of Taiwan Based on Hilbert-Huang Transform *WANG Ming-Shu（王明舒）, *Wu Shaohua（吴绍华）, **Yu Tong（于桐） * Department of Land Resource and Tourism Sciences, Nanjing University, Nanjing 210093, P.R. China ** Software Institute, Nanjing University, Nanjing 210093, P.R. China Abstract: As housing price soars, renting house becomes a hot issue. To rightly address the non-linear and non-stationary house rent price index is relevant to real estate industry. This paper introduced a novel approach named Hilbert-Huang Transform (HHT) to analysis the trends and turning points of the house rent price index. The first step of HHT is Empirical Mode Decomposition (EMD), with which any complicated data set can be adaptively decomposed into a finite number of Intrinsic Mode Functions (IMFs). Then the reconstruction of IMFs indicates the inherent characteristics in the house rent price index. After applying the Hilbert transform (HT), instantaneous frequencies (IFs) give sharp identifications of the changing points in the time-series. This approach was used to analysis the trend of house rent price of Taiwan through HHT and EMD. The result shows the trends of house rent price in ten-years, twenty-five years as well as in thirty-years. Additionally, it self-adaptively discovered the three turning points in the real estate market which fit close to the real estate cycle of Taiwan. Compared with traditional methods namely Fourier Transform and Wavelet Transform which request priori, HHT is totally self-adaptive, highly efficient and more applicability to analyze time-series in real estate domain. Key Words: House Rent Pricing, Hilbert–Huang Transform (HHT), Empirical Mode Decomposition (EMD), Time-series Analysis, Taiwan WANG Ming-Shu: No. 22 Hankou Road, Department of Land Resource and Tourism Sciences, Nanjing University, Nanjing, P.R. China, 210093. Email:wangmingshu2010@ 2 1 Introduction Accordin