Do Real Estate Brokers Drive Housing Prices? Heterogeneous Quantile Causality

ABSTRACT

While real estate brokers are generally expected to improve market efficiency by reducing information asymmetry and facilitating transactions, their impact on housing prices remains inconclusive in the existing literature. This study investigates the relationship between brokerage activity and housing prices in the housing markets of Taiwan's six major municipalities. Using the bootstrap Fourier quantile Granger causality approach, we examine whether the causal relationship between broker numbers and housing prices varies across different housing market conditions. The results reveal substantial heterogeneity across municipalities. Brokerage activity is positively associated with housing prices in Taipei, Taichung, and Kaohsiung, but negatively associated with housing prices in Taoyuan and Tainan under weaker market conditions. In New Taipei, broker numbers appear to reflect transaction‐cost considerations rather than exerting a direct influence on housing prices. We also find evidence of reverse causality, whereby rising housing prices stimulate growth in broker numbers, particularly in Taipei, Taoyuan, Taichung, and Kaohsiung during periods of strong market performance. These findings suggest that the economic role of brokers varies according to local housing market structures and stages of market development. This study contributes to the housing market literature by demonstrating that brokerage activity has heterogeneous effects across market conditions and municipalities. The results provide important implications for housing policy, market regulation, and the development of the real estate brokerage industry.