Analysing Construction Cost Shocks with a High-Resolution Housing Market Agent-Based Model

Hungary

“…Kiss and Vadas (2005) found that a one percent increase of mortgage rates resulted in, respectively, about 1.0 and less than 0.3 percentage point decline of housing investments and private consumption compared to the baseline.26 Box 3 in the MNB's May 2022 Housing Market Report describes the simulation. Details of the model-which comprises a complete mapping of the about 4 million heterogenous Hungarian households-are available in the following video andMérő et al (2022). The model captures the interest rate, credit, and wealth channels.…”