Interest Rate Elasticity of Residential Housing Prices

Iossifov, Plamen K; Čihák, Martin; Shanghavi, Amar

doi:10.5089/9781451871050.001

Cited by 35 publications

(33 citation statements)

References 15 publications

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“…This consists with literature. Iossifov, Cihák, & Shanghavi (2008) summarized, for example, the international findings of such elasticity ranging from zero to around negative Table 7. Cointegration derived from VeC (1) output (dependent variable = ln P t ).…”

Section: Long-run Equilibrium In the Systemmentioning

confidence: 99%

House prices and long-term equilibrium in the regulated market of the Netherlands

Haan

Boelhouwer

2017

Housing Studies

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a otB-Research for the Built environment, delft university of technology, delft, the netherlands; b statistics netherlands, the Hague, the netherlands ABSTRACT This paper establishes a simple affordability model that implicitly incorporates the major Dutch market features to elucidate long-run house prices under a regulatory environment. The results reveal a long-run relationship for house prices under strict regulations. The association among house prices, income, interest rates, and inflation is verified using an aggregated dataset. In the long-run, incomes and interest rates function as the two prime forces driving price dynamics, whereas the role of inflation is limited.

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Section: Long-run Equilibrium In the Systemmentioning

confidence: 99%

House prices and long-term equilibrium in the regulated market of the Netherlands

Haan

Boelhouwer

2017

Housing Studies

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“…In general, there are three types of risk preferences; riskloving, risk-neutral and risk-averse. Iossifov et al (2008) indicated that investors often misunderstand the positive relationship between risk and return. Undertaking a riskier investment does not guarantee a higher return.…”

Section: Risks Of Investmentmentioning

confidence: 99%

Indicators in the Purchase of Housing Properties

Eze

Lim²

2013

JSAR

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This paper examines the effects of key indicators (risk of inflation, inflation hedge, property prices, real income of investors, access to financing, and interest rates) on investors' investors' decision to purchase a real estate property. The data for this study were obtained by conducting a detailed literature review on the key indicators and relevant theories. The outcome of this paper is a conceptual framework of the proposed ideas. We hope that this critical review will provide relevant materials for the real estate industry as well as researchers to build capacity, and knowledge in developing relevant scales and measures for future assessments of purchase decisions involving real estate property.

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“…The "principal-agent" framework describes a situation in which lenders cannot obtain the information that they would know about borrowers without facing a cost. 11 Iossifov, Čihák, and Shanghavi (2008) study the interest rate elasticity of residential housing prices. They point out that the acquisition of real estate assets is undertaken by means of external finance since the price of this asset is a multiple of home buyers' disposable income.…”

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confidence: 99%

Modeling the Housing Market in OECD Countries

Arestis

González

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in May 2013The Levy Economics Institute Working Paper Collection presents research in progress by Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals.Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic research it generates viable, effective public policy responses to important economic problems that profoundly affect the quality of life in the United States and abroad. ABSTRACTRecent episodes of housing bubbles, which occurred in several economies after the burst of the United States housing market, suggest studying the evolution of housing prices from a global perspective. We utilize a theoretical model for the purposes of this contribution, which identifies the main drivers of housing price appreciation-for example, income, residential investment, financial elements, fiscal policy, and demographics. In the second stage of our analysis, we test our theoretical hypothesis by means of a sample of 18Organisation for Economic Co-operation and Development (OECD) countries from 1970 to 2011. We employ the vector error correction econometric technique in terms of our empirical analysis. This allows us to model the long-run equilibrium relationship and the short-run dynamics, which also helps to account for endogeneity and reverse-causality problems.

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Interest Rate Elasticity of Residential Housing Prices

Abstract: This Working Paper should not be reported as representing the views of the IMF.

Cited by 35 publications

References 15 publications

House prices and long-term equilibrium in the regulated market of the Netherlands

House prices and long-term equilibrium in the regulated market of the Netherlands

Indicators in the Purchase of Housing Properties

Modeling the Housing Market in OECD Countries

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