Housing Careers, Price–Rent Ratios and Rental Equivalence

Borgersen, Trond-Arne; Sommervoll, Dag Einar

doi:10.1080/14036096.2011.622784

Cited by 8 publications

(14 citation statements)

References 13 publications

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“…run deviations are shown to exist, these are unlikely to distort our estimations, which focus on dynamics over a five-year horizon (Borgersen and Sommervoll, 2012). 2.…”

Section: Resultsmentioning

confidence: 84%

Do rising rents lead to longer commutes? A gravity model of commuting flows in Ireland

Ahrens

Lyons

2020

Urban Studies

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The classical monocentric city model suggests that property prices decrease and transport costs rise with distance to the urban centre, implying that employees face a trade-off between long commutes and high housing costs when making location decisions. Accordingly, some commuters might be forced to take on longer commutes due to rising rents in central locations. In this study, we investigate empirically whether the rental differential between employment centres and residential areas predicts changes in average commuting times. To this end, we consider a gravity model of commuting flows for Ireland over 2011–2016. We present results for Ireland and the metropolitan area of Dublin, which constitutes the largest commuting region in Ireland. The results imply that a 10% rise in rents in employment centres is associated with an up to 0.6 minute rise in one-way daily average commuting times nationally (about 2.2% of the average commute duration).

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“…run deviations are shown to exist, these are unlikely to distort our estimations, which focus on dynamics over a five-year horizon (Borgersen and Sommervoll, 2012). 2.…”

Section: Resultsmentioning

confidence: 84%

Do rising rents lead to longer commutes? A gravity model of commuting flows in Ireland

Ahrens

Lyons

2020

Urban Studies

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“…The linear model of Borgersen and Sommervoll (2012) introduces a housing market with three segments for owner-occupied housing:…”

Section: Equity Gains and A Heterogeneous Housing Market Structurementioning

confidence: 99%

“…This paper extends the model of Borgersen and Sommervoll (2012) and relates short-run deviations in the price-to-income (PTI) ratio to the prevailing housing market structure and the intensity of equity-induced up-trading between segments. The purpose is twofold.…”

Section: Introductionmentioning

confidence: 99%

“…The paper shows that it is not only the strength of the 205 Equity and the housing market structure equity-induced up-trading but also its distribution between segments that matters for short-run overreactions in the PTI ratio. The paper is structured as follows: the heterogeneous housing market model of Borgersen and Sommervoll (2012) is given in Section 2, where we also distinguish between our stylized housing market regimes. Section 3 relates the housing market structures that ensure constant PTI ratios to the distribution of equity-induced up-trading between segments across our four regimes.…”

Section: Introductionmentioning

confidence: 99%

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Equity induced up-trading and the housing market structure

Borgersen

2014

International Journal of Housing Markets and Analysis

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Equity induced up-trading and the housing market structure: Implications for price-toincome (PTI) and macroprudential interventions Trond-Arne Borgersen Article information:To cite this document: Trond-Arne Borgersen , (2014),"Equity induced up-trading and the housing market structure", International Abstract Purpose -The purpose of this paper is to highlight the importance of home equity and the interplay between market segments for housing market developments. The intention is to show that it is not only the aggregate equity gain but also the distribution of equity gains between segments that matter for how shocks to income impact house prices. Design/methodology/approach -The paper sets out a linear housing market model with three segments. Households trade up a housing ladder and link the three segments for owner-occupied housing. The up-trading is equity-induced. An expression for the house price index, which is related to the market segment prices both directly through the segment size and indirectly through a segment position on the housing ladder is derived. The author considers the price effects of shocks to income in four housing market regimes. Findings -The heterogeneous housing market model shows how the interplay between segments impacts housing markets. When considering shocks to income, short-run deviations in the price-to-income (PTI) ratio compared to their long-run equilibrium due to equity-induced up-trading were found. The extent of PTI overshooting is related to the intensity of equity-induced up-trading between different segments. The market structure necessary to eliminate such overshooting is contingent on the distribution of equity gains between segments. Finally, the paper shows how the price effects of macroprudential interventions might be non-negligible when indirect effects are taken into account. Originality/value -The linear housing market model with three market segments introduces a framework where the intensity of equity-induced up-trading in different market segments can be analyzed. This distributional aspect is, to the best of the author's knowledge, novel. The context-specific relation between housing market structure, equity-induced up-trading and short-run deviations in the PTI ratio provides a foundation for future research.

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“…Skiller vi mellom segmenter har prisene på leiligheter steget mer enn prisene på eneboliger, saerlig de siste par årene (se Figur 2). Boligetterspørselen bestemmes både av et investeringsmotiv, av husholdningenes behov for boligkonsum og av boligens egenskap som pantesikkerhet for lån (Borgersen og Sommervoll, 2012). I litteraturen påpekes hvordan det optimale boligkonsum for en nyttemaksimerende husholdning ikke alltid sammenfaller med boligkapitalens optimale porteføljeandel for den (samme) risikoaverse husholdning (se for eksempel Flavin og Yamashita, 2012).…”

Section: Introduksjonunclassified

Risikojustert meravkastning i boligmarkedet

Borgersen¹,

Kivedal²

2017

PØF

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I hele landet har boligprisene steget betydelig siden tidlig på 90-tallet. Til tross for sterk boligprisvekst, vokser prisene i ulike segmenter forskjellig. Det er også geografiske variasjoner i prisveksten. Denne artikkelen ser naermere på sammenhengen mellom prisvekst og prisrisiko i ulike regioner og segmenter av boligmarkedet der vi belyser meravkastningen for ulike boliginvesteringer ved hjelp av to finansteoretiske indikatorer som tilpasses boligmarkedet: Sharpe-raten som skalerer meravkastning med samlet prisrisiko, og Treynorraten som skalerer med systematisk risiko. 1

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Housing Careers, Price–Rent Ratios and Rental Equivalence

Cited by 8 publications

References 13 publications

Do rising rents lead to longer commutes? A gravity model of commuting flows in Ireland

Do rising rents lead to longer commutes? A gravity model of commuting flows in Ireland

Equity induced up-trading and the housing market structure

Risikojustert meravkastning i boligmarkedet

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