Journal articles: 'House inflation'

1

Anari, Ali, and James Kolari. "House Prices and Inflation." Real Estate Economics 30, no. 1 (April 2002): 67–84. http://dx.doi.org/10.1111/1540-6229.00030.

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van Rensburg, L. Janse, and P. Burger. "House Price Inflation in Johannesburg." Studies in Economics and Econometrics 35, no. 3 (December 1, 2011): 65–84. http://dx.doi.org/10.1080/10800379.2011.12097227.

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Kuang, Weida, and Peng Liu. "International Real Estate Review." International Real Estate Review 18, no. 2 (June 30, 2015): 217–40. http://dx.doi.org/10.53383/100200.

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In recent years, housing prices and inflation have been growing constantly in China. Higher house prices and higher inflation affect both household consumption and economic growth. We have developed a four-sector general equilibrium model of consumers, developers, firms, and the central bank to illustrate the relationship of house prices with inflation. The theoretical model demonstrates that house prices and inflation are positively correlated and endogenously determined. By using panel databases of 35 major cities in China during the period of 1996-2010, we find that the association between house prices and inflation is asymmetric. The impact of inflation on housing prices is greater than that of housing prices on inflation, which implies that housing prices effectively hedge inflation. Secondly, household income positively affects housing prices, but interest rates negatively influence housing prices. Accordingly, to curb soaring housing prices, policymakers not only should balance supply and demand, but also control for inflation. Thirdly, economic growth has less of an impact on inflation than housing prices. Hence, abnormal housing price increases are more likely to exacerbate inflation than economic growth. In addition, housing prices have a greater impact on inflation than rental prices, albeit the latter is a component of the consumer price index (CPI). Finally, money supply has much greater effects on inflation than housing prices and economic growth.

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Hedlund, Aaron. "Failure to Launch: Housing, Debt Overhang, and the Inflation Option." American Economic Journal: Macroeconomics 11, no. 2 (April 1, 2019): 228–74. http://dx.doi.org/10.1257/mac.20160371.

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Can inflating away nominal mortgage liabilities effectively combat recessions? I address this question using a model of illiquid housing, endogenous credit supply, and equilibrium default. I show that, in an ordinary recession, temporarily raising the inflation target has only modest or even counterproductive effects. However, during episodes like the Great Recession, inflation effectively boosts house prices, consumption, and dramatically cuts foreclosures, but only when fixed-rate mortgages are the dominant instrument. The quantitative implications of inflation also vary if other nominal rigidities or demand externalities are present. In the cross section, inflation delivers especially large gains to highly leveraged homeowners. (JEL D14, E31, E32, E52, G21, R31)

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Breitenfellner, Andreas, Jesús Crespo Cuaresma, and Philipp Mayer. "Energy inflation and house price corrections." Energy Economics 48 (March 2015): 109–16. http://dx.doi.org/10.1016/j.eneco.2014.08.023.

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Eizenstat, Stuart E. "Economists and White House Decisions." Journal of Economic Perspectives 6, no. 3 (August 1, 1992): 65–71. http://dx.doi.org/10.1257/jep.6.3.65.

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While I served in the White House, [as Assistant to the President for Domestic Affairs and Policy and Executive Director of the White House Domestic Policy Staff from 1977–81], Ph.D. economists occupied the positions of Secretary of Labor, Secretary of Commerce, Secretary of Treasury, Director of the Council on Wage and Price Stability, the President's anti-inflation adviser, Chairman and Council Members of the Council of Economic Advisers, and many other senior positions throughout the government. Yet we presided over an economy with double-digit inflation and interest rates and a recession. Presidents of the United States and their White House Staff members expect economists to be omniscient prophets of the future course of the economy, unerring economic policy advisers, and teachers of the mysterious science of economics to often distracted pupils. They expect their economists to provide an economic blueprint for high growth, low inflation, and a guaranteed re-election—but without offending any important constituencies. What is the appropriate role for economists in the White House? What can they realistically be expected to do?

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Stern, David. "Explaining UK house price inflation 1971–89." Applied Economics 24, no. 12 (December 1992): 1327–33. http://dx.doi.org/10.1080/00036849200000093.

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Chinloy, Peter, Man Cho, Cheng Jiang, and Inho Song. "Housing Returns with Mortgage and Price Shocks." Journal of Real Estate Research 42, no. 1 (January 2020): 105–24. http://dx.doi.org/10.22300/0896-5803.42.1.105.

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We examine the sum of the net rent-price ratio plus the expected real capital gains, which is the real return to holding a house. The rent-price ratio depends on expectations about interest rates, inflation, and real house prices. The shock coefficients are their incidences, which are the proportions of risk that occupants bear. Occupants are on the demand side, as tenants or owners. For U.S. houses with quarterly data between 1981 and 2016, these incidences are below 0.15, limiting rent-price volatility. The low-volatility yield forces real capital gains to near zero, leading houses to bond-like returns.

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Hay, Colin. "Good Inflation, Bad Inflation: The Housing Boom, Economic Growth and the Disaggregation of Inflationary Preferences in the UK and Ireland." British Journal of Politics and International Relations 11, no. 3 (August 2009): 461–78. http://dx.doi.org/10.1111/j.1467-856x.2009.00380.x.

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This article presents a comparative analysis of the determinants, sustenance and broader macroeconomic consequences of the ultimately unsustainable housing boom in Ireland and the UK in recent years. It examines, in particular, the role played by ostensibly depoliticised monetary policy in both contexts in the development of a house price bubble that has served to fuel consumer-led growth. It assesses the viability, sustainability and reproducibility of the private debt-financed consumer boom that house price inflation has generated. In the process it draws attention to the increasingly differentiated character of both government inflationary preferences and counter-inflationary performance—with the shift to official measures of inflation that exclude mortgage interest repayments and, in the UK at least, to the covert re-politicisation of monetary policy. It concludes by suggesting that governments may well not have time-inconsistent inflationary preferences so much as sectorally specific inflationary preferences. This might be summarised in terms of the aphorism: ‘retail price inflation bad, house price inflation good’.

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Aladangady, Aditya, Elliot Anenberg, and Daniel Garcia. "House Price Growth and Inflation During COVID-19." FEDS Notes, no. 2022-11-17 (November 2022): None. http://dx.doi.org/10.17016/2380-7172.3228.

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House prices have risen rapidly during the pandemic, creating $9 trillion in owner occupied housing wealth between the first quarter of 2020 and the first quarter of 2022. Both housing and non-housing inflation also moved up over this time period to its highest level in many decades.

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Kean Yan, Fong, Yap Lya Keng, and Kwek Kien Teng. "Empirical Analysis of House Price Bubble: A Case Study on Malaysia." International Journal of Business and Management 11, no. 12 (November 20, 2016): 127. http://dx.doi.org/10.5539/ijbm.v11n12p127.

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The main objective of this research is to investigate the relationship between house price with macroeconomics variables - Gross Domestic Product per capita, inflation rate, Base Lending Rate and amount of household loan disbursed for purchase of residential properties. We try to use these variables to examine if they could trigger a housing bubble to burst in Malaysia. Granger Causality results show that there is univariate relationship from house price to Gross Domestic Product per capita. Though house price and other macroeconomics variables do not Granger–cause each other in short run, but these variables are cointegrated in the long run, i.e. there is no evidence of house price bubble in Malaysia. We suggest that soaring house prices in Malaysia is being supported by the large inflow of foreign funds into the housing sector and the unresponsive supply of houses.

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Mohd Zaki, Hazmi Hamizan. "The Determinants of House Prices in Malaysia." International Journal of Management, Finance and Accounting 2, no. 1 (February 25, 2021): 1–18. http://dx.doi.org/10.33093/ijomfa.2021.2.1.1.

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This paper studied how house prices were affected by macroeconomic factors from Q1 2009 to Q4 2018. The short and long-run effects of real income, nominal interest rates, inflation rate and stock prices on house prices in Malaysia were examined with the autoregressive distributed lag (ARDL) of a restricted error correction model (ECM). It was discovered that the selected macroeconomic factors were cointegrated with house prices. Income, represented by real Gross Domestic Product (GDP), significantly affected house prices in the short and long-run. Inflation and interest rate, proxied by Consumer Price Index (CPI) and Overnight Policy Rate (OPR), respectively, affected house prices significantly in the long-run. The stock market, tracked by Kuala Lumpur Composite Index (KLCI), had no significant impact on house prices signifying no wealth effect. Through the findings of an inelasticity of demand and an undesirable result of monetary policies, this paper concluded that more effective solutions needed to be carried out to ensure affordability of house ownership in Malaysia.

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Umar, Muhammad, Moin Akhtar, Muhammad Shafiq, and Zia-Ur-Rehman Rao. "Impact of monetary policy on house prices: case of Pakistan." International Journal of Housing Markets and Analysis 13, no. 3 (December 19, 2019): 503–12. http://dx.doi.org/10.1108/ijhma-12-2017-0106.

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Purpose This study aims to explore the impact of monetary policy on house prices in Pakistan. Design/methodology/approach This study uses monthly time-series data of house prices, monetary policy, inflation and stock market index ranging from January 2011 to December 2016. All the series were checked for stationarity by using augmented Dickey–Fuller test, and lag length of 11 was decided on the basis of Schwert’z rule of thumb. Vector autoregressive (VAR) model was used because the series were not co-integrated. Findings The analysis revealed that monetary policy significantly affects house prices in Pakistan. Tight monetary policy results in lower house prices and vice versa. The relationship between monetary policy and house prices is unidirectional. The study also finds that higher inflation also leads to soaring house prices, but the variation in stock market index does not affect house prices. Originality/value To the best of authors’ knowledge, none of the existing studies explores the impact of monetary policy on house prices in Pakistan. The findings help investors and policy makers to understand the relationship between monetary policy and house prices to make better decisions.

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Mohd Husnin Mat Yusof, Syahrul Hezrin Mahmud, Mohd Ariff Nafizi Ibrahim @ Mat Nor, and Muhammad Fauzi Embong. "A Relationship among Interest Rate, Inflation, Population and House Price Index." Journal of Advanced Research in Business and Management Studies 29, no. 1 (January 5, 2023): 9–19. http://dx.doi.org/10.37934/arbms.29.1.919.

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The Financial Stability Review Second Half 2021 of Bank Negara Malaysia’s (BNM) has reported that the number of unsold houses in Malaysia remained elevated at 180,702 units in the third quarter of 2021 (Q3’21). This has attracted the researcher to explore more on House Price Index (HPI) in Malaysia. HPI measures volatility prices of residential housing in Malaysia over time. The objective of this study is to identify whether there is a relationship among interest rate, inflation rate, population, and house price index in Malaysia by using STATA software. The annual time series data spanning from 2003 to 2021 is used to achieve the objective of this research. The analysis of such times series data was made through the Johansen Test and it was discovered that all explanatory variables were related to HPI in a long run; in which it is negatively related to interest rate, inflation rate and population. However, when the Granger Causality Test was applied to the same time series data, HPI was found to be affected by both the interest and the inflation. Population, on the other hand, does not influence HPI in the short run dynamics. Therefore, it is concluded that most variables used in the study are significant in determining HPI. It is recommended that more independent variables such as real GDP per capita, real domestic credit, construction costs and land supply that can influence HPI should be added for future studies .

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Taltavull de La Paz, Paloma, and Michael White. "The sources of house price change: identifying liquidity shocks to the housing market." Journal of European Real Estate Research 9, no. 1 (May 3, 2016): 98–120. http://dx.doi.org/10.1108/jerer-11-2015-0041.

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Purpose The purpose of this paper is to examine the role of monetary liquidity in house price evolution through examining the Asset (housing) Inflation channel. It identifies the main channels of transmission affecting house prices from monetary supply channels to house price change, examining how the Asset Price channel transmits changes in M1 to housing prices in Spain and the UK. Design/methodology/approach The paper uses Vector Auto Regression (VAR) and Error Correction models to test the Asset Inflation channel in the UK and Spain from 1991 to 2013 in two steps. In the first step, the supply elasticity is estimated through the long-term relationship between house prices and stock supply. The second step estimates a Vector Error Correction (VEC) to explain house price dynamics conditioned on supply reactions. The latter is defined as a long-term inverse demand model where housing prices are controlled by fundamentals in each market. Models allow forecast testing using Choleski impulse responses methodology. Findings Several results are found. In the supply model, both countries show rapid convergence to equilibrium with a larger elasticity of supply in Spain than in the UK but with a short run effect of new supply on prices in the UK. Regarding the Asset Inflation Channel model, the paper finds evidence of the existence of a housing accelerator effect in Spain, but not in the UK where changes in liquidity fully impact house prices in one direction. Research limitations/implications Implications of findings are mainly to forecast the effects of Monetary Policy measures in different economies. Practical implications The model supports the evaluation of different impacts of monetary policy in territories. It shows that the same policy will have different impacts in different housing markets and therefore highlights the importance of examining each market separately to identify the appropriate policy interventions. Originality/value This is the first paper that estimates the impact of the Asset Inflation Channel on house prices that endogenises housing market conditions and compares effects and interrelationships in two different economies.

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Barrell, Ray, Simon Kirby, and Rebecca Riley. "The Current Position of UK House Prices." National Institute Economic Review 189 (July 2004): 57–60. http://dx.doi.org/10.1177/002795010418900105.

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House price inflation in the UK has been particularly high in recent years. This has led to much discussion concerning the future path of house price growth. Whether the future scenario involves a moderation or instead a sharp correction in house prices has important implications for the short to medium path of household consumption expenditure.

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Laurinavičius, Alfredas, Antanas Laurinavičius, and Algimantas Laurinavičius. "MACROECONOMIC VARIABLES INFLUENCING HOUSING PRICES IN VILNIUS." International Journal of Strategic Property Management 26, no. 1 (December 2, 2021): 24–34. http://dx.doi.org/10.3846/ijspm.2021.15961.

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The way macroeconomic variables such as unemployment/GDP per capita/inflation/wages/internal migration influenced housing prices (nominal house prices and housing rent prices) in Vilnius in 2006–2019 has been investigated in the research. Conditions under which different macroeconomic variables could influence housing prices were established in the research. Lower unemployment, higher GDP per capita and inflation rate were all related to higher nominal house prices in Vilnius. Higher GDP per capita, wages and internal migration were positively related to housing rent prices in Vilnius. Analyzed macroeconomic variables all together explained 88 percent of variance of nominal house prices in Vilnius over the period of 2006–2019 and 80 percent of variance of housing rent prices in Vilnius over the same period.

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Gupta, Rangan, and Alain Kabundi. "The effect of monetary policy on house price inflation." Journal of Economic Studies 37, no. 6 (November 2, 2010): 616–26. http://dx.doi.org/10.1108/01443581011086657.

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Naji Meidani, Ali A., Maryam Zabihi, and Malihe Ashena. "House prices, Economic Output, and Inflation Interactions in Iran." Research in Applied Economics 3, no. 1 (May 10, 2011): 2. http://dx.doi.org/10.5296/rae.v3i1.664.

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Barari, Mahua, and Srikanta Kundu. "The Role of the Federal Reserve in the U.S. Housing Crisis: A VAR Analysis with Endogenous Structural Breaks." Journal of Risk and Financial Management 12, no. 3 (July 23, 2019): 125. http://dx.doi.org/10.3390/jrfm12030125.

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This paper reexamines the role of the Federal Reserve in triggering the recent housing crisis. Specifically, we explore if the relationship between the federal funds rate and the housing variables underwent structural changes in the wake of the housing crisis. Using quarterly data spanning 1960–2017, we estimate a VAR model involving federal funds rate, real GDP growth and a housing variable (captured by house price inflation or residential investment share or housing starts) and conduct time series analysis for the pre- and post-crisis periods. While previous studies mostly set break-dates based on events known a priori to split the full sample to subsamples, we endogenously determine structural break points occurring at multiple unknown dates. Our Granger causality analysis indicates that the federal funds rate did not cause house price inflation, although it caused residential investment share and housing starts in the pre-crisis period. In the post-crisis period, the real GDP growth caused residential investment and housing starts while house price inflation had a momentum of its own. Our impulse response and forecast error variance decomposition analysis reinforce these results. Overall, our findings suggest that housing volume fluctuates more than house prices over the business cycle.

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Ryczkowski, Maciej. "MONEY, CREDIT, HOUSE PRICES AND QUANTITATIVE EASING – THE WAVELET PERSPECTIVE FROM 1970 TO 2016." Journal of Business Economics and Management 20, no. 3 (May 2, 2019): 546–72. http://dx.doi.org/10.3846/jbem.2019.9859.

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This paper investigates the relationship between money/credit growth and house price inflation for a sample of twelve developed countries. The novel application of the continuous wavelet transform showed significant but time-varying linkages between these two variables. During quantitative easing in the United States and the United Kingdom, growth of respectively broad money and bank credit was leading house price inflation for the 2-8 years cycle. In contrast to this, the Bank of Japan and the European Central Bank either did not assign a separate role to house prices in their reaction functions or the two central banks were not capable to significantly increase house prices by extending money/credit during the business cycle. The significant co-movements of financial variables and house prices around booming episodes warn us that a new asset price boom might appear within the length of a business cycle as a consequence of overly expansionary monetary policy. In the euro area, the significant, long run, and close to a one-for-one link between growth of M3 and house price inflation is an argument for the monetary pillar of the European Central Bank. The present study contributes significantly to the literature by introducing a novel application of a continuous wavelet transform to study the housing prices in relation to money, credit and quantitative easing. The article uses a long-term dataset covering a period of almost half a century to analyse their varying relationship in the short-run to the long-run and from the historical perspective.

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Mariyam, Sidra, and Wasim Shahid Malik. "The Role of Monetary Policy in Transmission of Asset Prices into Goods Prices." Journl of Applied Economics and Business Studies 4, no. 1 (March 30, 2020): 143–67. http://dx.doi.org/10.34260/jaebs.417.

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Monetary policy in the contemporary world reacts, through short term interest rate, to deviations of inflation rate and output from their respective targets, while asset prices are responded to the extent they contribute to these deviations. This practice significantly affects transmission of asset prices into goods prices, which has serious implications for income distribution. This paper sets the objectives of estimating transmission of asset prices into goods prices and the role of monetary policy in influencing this transmission. In this regard, the paper hypothesizes that inflation rate positively responds to asset prices and this response weakens if interest rate leans against the winds of inflation, output and asset prices. To test these hypotheses, we have estimated different specifications of vector autoregressive (VAR) model and impulse response functions have been found after identifying structural shocks. Data of Pakistan’s economy on inflation rate, large scale manufacturing index, interest rate and asset price index – comprising house prices, stock prices and exchange rate – are used for the time period 2000m01 to 2019m06. We find evidence in support of both hypotheses; asset price inflation positively transmits into goods price inflation and this transmission intensifies if interest rate does not respond to other variables in the model. Moreover, transmission of asset prices into inflation rate, as compared to output, is influenced more by monetary policy. Finally, we find that the transmission of exchange rate and house prices to inflation rate are very much affected by monetary policy while in case of stock prices the influence of policy is moderate.

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Ekemode, Benjamin Gbolahan. "A fresh look at the inflation-hedging attributes of residential property investments in emerging markets: evidence from Nigeria." Property Management 39, no. 3 (February 8, 2021): 419–38. http://dx.doi.org/10.1108/pm-03-2020-0020.

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PurposeThis study reinvestigates the short-run and long-run inflation-hedging attributes of residential property assets in the Nigerian property market, based on variations in property types and location.Design/methodology/approachData used for this study comprised the holding period returns of three residential property types, namely bungalow, block of flats and detached house during 1999–2018. These were obtained from property practitioners in Lagos, Abuja and Port Harcourt, respectively. The inflation values obtained from the National Bureau of Statistics were split into actual, expected and unexpected components. Fama and Schwert’s (1977) ordered least square (OLS) regression was used to assess the short-term inflation hedging efficacy. Afterwards, the long-run link between residential property and inflation was examined using the Johansen and Juselius cointegration test.FindingsThe results showed that despite the variations in hedging behaviour across property types in the three locations, residential property assets significantly provided protection over actual, expected and unexpected inflation in the short run based on the OLS regression analysis. The result of the Johansen and Juselius cointegration test also established a long-term link between the residential property assets and actual inflation. However, mixed results were found on the link between residential property and expected and unexpected inflation, as some of the assets did not effectively hedge these inflation components in the long run.Practical implicationsThe study implied that the differences in property types and geographic locations are crucial in establishing the short-run and long-run inflation-hedging attributes of residential property assets and should be factored into consideration.Originality/valueThe paper complements the existing body of knowledge on the inflation-hedging attributes of residential property in emerging markets by determining the effects of variation in house types and geographic differences on the analysis.

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Erol, Isil, and Kanak Patel. "International Real Estate Review." International Real Estate Review 10, no. 1 (June 30, 2007): 48–92. http://dx.doi.org/10.53383/100076.

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This paper evaluates the default risk of civil servants’ wage-indexed payment mortgage (WIPM) contract in Turkey, which is linked to the expected inflation. The aim of the study has two sides: one is to apply the contingent claims approach, which has been widely used to price standard fixed- and adjustable-rate contracts, to price an inflation-indexed mortgage. The second is to understand if WIPM contract is a suitable mortgage design for lenders under an inflationary economy. We extend the traditional risk-neutral valuation for pricing the WIPM contract with its embedded default option. Using backward pricing method, namely the explicit finite difference method, we evaluate this unique nflation-indexed mortgage contract from the lender’s point of view. The expected inflation and house price are the two tochastic variables underlying the WIPM contract. Our numerical results show that the lender benefits from originating WIPM only during the periods when the real interest rate is very low. Expected inflation risk premium notably increases the value of future payments on WIPM contract, resulting in high values of lender’s position in the mortgage agreement. The results also show that house price volatility has a greater effect on the borrower’s default option value compared to the expected inflation volatility

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Chen, Robert W., Larry A. Shepp, and Alan Zame. "A bold strategy is not always optimal in the presence of inflation." Journal of Applied Probability 41, no. 2 (June 2004): 587–92. http://dx.doi.org/10.1239/jap/1082999089.

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A gambler, with an initial fortune less than 1, wants to buy a house which sells today for 1. Due to inflation, the price of the house tomorrow will be 1 + α, where α is a nonnegative constant, and will continue to go up at this rate, becoming (1 + α)n on the nth day. Once each day, he can stake any amount of fortune in his possession, but no more than he possesses, on a primitive casino. It is well known that, in a subfair primitive casino without the presence of inflation, the gambler should play boldly. The presence of inflation would motivate the gambler to recognize the time value of his fortune and to try to reach his goal as quickly as possible; intuitively, we would conjecture that the gambler should again play boldly. However, in this note we will show that, unexpectedly, bold play is not necessarily optimal.

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Chen, Robert W., Larry A. Shepp, and Alan Zame. "A bold strategy is not always optimal in the presence of inflation." Journal of Applied Probability 41, no. 02 (June 2004): 587–92. http://dx.doi.org/10.1017/s0021900200014534.

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A gambler, with an initial fortune less than 1, wants to buy a house which sells today for 1. Due to inflation, the price of the house tomorrow will be 1 + α, where α is a nonnegative constant, and will continue to go up at this rate, becoming (1 + α) n on the nth day. Once each day, he can stake any amount of fortune in his possession, but no more than he possesses, on a primitive casino. It is well known that, in a subfair primitive casino without the presence of inflation, the gambler should play boldly. The presence of inflation would motivate the gambler to recognize the time value of his fortune and to try to reach his goal as quickly as possible; intuitively, we would conjecture that the gambler should again play boldly. However, in this note we will show that, unexpectedly, bold play is not necessarily optimal.

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Inglesi-Lotz, Roula, and Rangan Gupta. "THE LONG-RUN RELATIONSHIP BETWEEN HOUSE PRICES AND INFLATION IN SOUTH AFRICA: AN ARDL APPROACH." International Journal of Strategic Property Management 17, no. 2 (June 27, 2013): 188–98. http://dx.doi.org/10.3846/1648715x.2013.807400.

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This paper investigates whether house prices provide a suitable hedge against inflation in South Africa by analysing the long-run relationship between house prices and the prices of non-housing goods and services. Quarterly data series are collected for the luxury, large middle-segment, medium middle-segment, small middle-segment and the entire middle segment of house prices, as well as, the consumer price index excluding housing costs for the period 1970:Q1–2011:Q1. Based on autoregressive distributed lag (ARDL) models, the empirical results indicate long-run cointegration between the house prices of all the segments and the consumer price index excluding housing costs. Moreover, the long-run elasticity of house prices with respect to prices of non-housing goods and services, i.e., the Fisher coefficient is greater than one for the luxury segment, virtually equal to one for the small middle-segment, and less than one for the large and medium middle-segments, as well as the affordable segments. More importantly though, the estimated Fisher coefficients are not statistically different from unity – a result consistent with the proposed theoretical framework relating housing prices and consumer prices excluding housing expenditure. In general, we infer that house prices in South Africa provide a stable inflation hedge in the long-run.

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Duemmler, Tobias. "An Extended Measure Of The User Costs Of Housing - New Evidence From The U.S." International Business & Economics Research Journal (IBER) 11, no. 10 (September 19, 2012): 1117. http://dx.doi.org/10.19030/iber.v11i10.7257.

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This paper is based on a traditional neoclassical approach to housing investment and our previous work carried out for Germany. In this study we check the relevance if the definition for the user costs of housing should be extended by an additional term which mirrors the credit constraints a household would be faced with for the U.S. economy. This extension term consists of the inflation gap between consumer and house price inflation multiplied with an average loan-to-value ratio and the real house prices. The empirical relevance of our finding is confirmed by a VECM using U.S. data. A time series for the user costs of housing in the U.S. is calculated.

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Xu, Bing, and Xiaowen Hu. "Alternative strategies to change negative output gaps rate in China." Management Decision 52, no. 7 (August 12, 2014): 1319–29. http://dx.doi.org/10.1108/md-11-2012-0789.

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Purpose – The purpose of this paper is to find alternative strategies to change negative output gaps in China. Design/methodology/approach – A path Philips curves approach is proposed to investigate output gaps, which develops hybrid Philips curves with the control variables of money, house prices and interest rates. Findings – An alternative strategy to stop the decline in output gaps rate is to perform interest rate, house price, and money growth rate about 3, 1 and 15 percent, respectively. The results also indicate that only one of monetary increase, changes in interest rates, and house price adjustments are difficult to change the negative output gap. Practical implications – Alternative strategies cannot only change the negative output gap, but also succeed in pushing the inflation rate down to 3 percent. Originality/value – This study provides a new path Philips curves to simulate how the macroscopic control variables influence output and inflation. It provides a useful insight for stopping the decline in output gaps.

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Shevchuk, Viktor. "Monetary determinants of house prices in Central and Eastern European countries." Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu 66, no. 4 (2022): 132–46. http://dx.doi.org/10.15611/pn.2022.4.09.

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This research aimed at the empirical estimation of the monetary determinants of house prices in the Czech Republic, Hungary, Poland, and Romania. The application of quarterly panel data for the period 2010-2019 indicates that a central bank policy rate increase was responsible for the fall in house prices, with a similar effect on house prices by a higher consumer inflation and nominal (real) exchange rate undervaluation. There was no reaction of house prices to the business cycle. However, the housing boom had a positive contribution to cyclical changes in output, while not affecting consumer prices and exchange rate.

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Chiwuzie, Augustina, and Daniel Ibrahim Dabara. "Housing construction costs and house rents fluctuations in an emerging property market: the case of Osogbo, Nigeria." Property Management 39, no. 4 (March 12, 2021): 527–45. http://dx.doi.org/10.1108/pm-06-2020-0041.

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PurposeCost of construction of residential properties as well as its subsequent rent trends remain a major challenge to stakeholders in the property rental markets of emerging economies. This study examined the relationship between housing construction costs and house rents fluctuations in Osogbo, Nigeria, to provide information for informed investment decisions.Design/methodology/approachThe authors conducted a survey, where three sets of questionnaires were administered on building contractors; estate surveyors and valuers and private residential property owners. The data required comprise the estimated average construction costs and average market rents for two and three-bedroom bungalows in the study area from 2008 to 2018. These data were respectively sourced from all the 15 firms of building contractors and 25 firms of estate surveyors and valuers in Osogbo, Nigeria. Stratified random sampling was employed to select 180 property owners from three medium-density residential districts of Osogbo. Secondary data on macroeconomic variables were sourced from the Central Bank of Nigeria. Data collected were analysed using descriptive and inferential statistical tools.FindingsThe authors found a significant positive relationship (0.749) between construction costs and house rents trends; both variables maintained ascending trends. Construction costs and house rents inflation rates exhibited random fluctuations with the former having a higher mean inflation rate (10.47%). However, the difference was not statistically significant (p-value = 0.317 > 0.05). Respondents identified consumer price index (CPI) inflation among other macroeconomic variables as the strongest predictor of both construction costs and house rents fluctuations. However, evidence from further analysis of the time series suggested otherwise.Practical implicationsThe result confirms construction cost as one of the vital supply factors of the housing market, which is often pass through to house rents. The positive relationship between construction costs and house rents trends should trigger new development which, will, in turn, allow rental housing investments to expand into new areas with prospects for profits that could be earned by domestic and foreign investors.Originality/valueThis study to the best knowledge of the researchers is the first to relate housing construction cost to house rent in Osogbo, Nigeria; thereby adding to the body of knowledge in this field.

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Vella, Luke. "The Macro Economic Factors affecting Property Prices in Malta." MCAST Journal of Applied Research & Practice 2, no. 1 (March 28, 2018): 4–27. http://dx.doi.org/10.5604/01.3001.0013.2066.

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Property prices have been on top of European governments’ agenda for decades as their contribution towards the whole economic system is imperative. Property prices in Malta have been on an upward trend and, lately, the upward trend has been larger than in previous years. Even though this is a sign of a strong and growing economy, it can have implications on residents due to affordability issues affecting their standard of living. This study seeks to determine the factors which have an influence on property price in Malta whilst also analysing the strength of the relationship each factor holds on house prices. This study examines the Gross Domestic Product, unemployment rate, population, inflation, the number of home loans within the Maltese economy, ageing population, the number of tourists, minimum wage, and development permits. Out of these nine variables tested, eight proved to be statistically significant. The variables which had the largest effect on house prices was the unemployment rate whilst the variable with the least effect on house prices was inflation.

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OâSULLIVAN, RÃISÃN. "HOUSE PRICES IN THE MEASUREMENT OF INFLATION IN THE EURO AREA." Contemporary Economic Policy 26, no. 2 (April 2008): 276–98. http://dx.doi.org/10.1111/j.1465-7287.2007.00069.x.

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Funke, Michael, Petar Mihaylovski, and Adrian Wende. "Out of Sync Subnational Housing Markets and Macroprudential Policies in the UK." De Economist 169, no. 4 (October 9, 2021): 445–67. http://dx.doi.org/10.1007/s10645-021-09394-1.

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AbstractWe examine whether regionally differentiated macroprudential policies can address financial stability concerns and moderate house price differences in the UK. We disaggregate both the household sector and the housing stock in a two-region DSGE model with out of sync subnational housing markets and compare four policy types: standard monetary policy, leaning against the wind monetary policy, national macroprudential policy or one that targets region-specific LTV ratios. In terms of reducing variances of house prices, regionally differentiated macroprudential policy performs best, provided the policy authorities are concerned with stabilising output and house prices rather than simply minimising the variance of inflation.

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Iskandar Mirza, Azrul Azlan, Asmaddy Haris, Ainulashikin Marzuki, Ummi Salwa Ahmad Bustamam, Hamdi Hakiem Mudasir, and Siti Nurazira Mohd Daud. "Housing Inflation: Policy Guidelines from Shariah Perspective." Journal of Muamalat and Islamic Finance Research 16, no. 1 (June 1, 2019): 70–81. http://dx.doi.org/10.33102/jmifr.v16i1.209.

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The soaring housing prices in Malaysia is not a recent issue. It is a global phenomenon especially in developing and developed countries, driven by factors including land price, location, construction materials cost, demand, and speculation. This issue demands immediate attention as it affects the younger generation, most of whom could not afford to buy their own house. The government has taken many initiatives and introduced regulations to ensure that housing prices are within the affordable range. This article aims to introduce a housing price control element from the Shariah perspective, as an alternative solution for all parties involved in this issue. It adopts content analysis methodology on policy from Shariah approved sources.

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Demary, Markus. "The interplay between output, inflation, interest rates and house prices: international evidence." Journal of Property Research 27, no. 1 (March 2010): 1–17. http://dx.doi.org/10.1080/09599916.2010.499015.

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Lees, Kirdan, and Sam Warburton. "A happy “half way-house”? Medium term inflation targeting in New Zealand." Journal of International Money and Finance 29, no. 5 (September 2010): 819–39. http://dx.doi.org/10.1016/j.jimonfin.2010.03.013.

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Christou, Christina, Rangan Gupta, Wendy Nyakabawo, and Mark E. Wohar. "Do house prices hedge inflation in the US? A quantile cointegration approach." International Review of Economics & Finance 54 (March 2018): 15–26. http://dx.doi.org/10.1016/j.iref.2017.12.012.

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Baldi, Guido. "The economic effects of a central bank reacting to house price inflation." Journal of Housing Economics 26 (December 2014): 119–25. http://dx.doi.org/10.1016/j.jhe.2014.09.004.

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Füss, Roland, and Joachim Zietz. "The economic drivers of differences in house price inflation rates across MSAs." Journal of Housing Economics 31 (March 2016): 35–53. http://dx.doi.org/10.1016/j.jhe.2015.12.002.

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Cai, Weina, and Sen Wang. "The Time-Varying Effects of Monetary Policy on House Prices in China: An Application of TVP-VAR Model with Stochastic Volatility." International Journal of Business and Management 13, no. 4 (March 19, 2018): 149. http://dx.doi.org/10.5539/ijbm.v13n4p149.

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The boom of housing market in China in recent years has attracted great concerns from all over the world. How monetary policy affects house prices in China becomes an essential topic. This paper studies the time-varying effects of monetary policy on house prices in China during 2005.7-2017.10, by using a time-varying parameter VAR model. This paper obtains three interesting results. First, there are time-varying features of the responses of house prices to monetary policy shocks half-year and 1-year ahead, no matter through interest rate channel or through credit channel. Second, interest rate channel and credit channel have been enhanced since financial crisis in 2008. Third, the responses of nominal house prices to monetary policy in China are mainly driven by the responses of real house prices, instead of inflation. Finally, this paper gives proper suggestions for each finding respectively to central bank in China.

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Égert, Balázs. "Prices and Price Convergence in Emerging Europe: an Overview." National Institute Economic Review 204 (April 2008): 66–84. http://dx.doi.org/10.1177/00279501082040010201.

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This paper seeks to provide a comprehensive overview of the long-term factors that explain divergent price levels across developed and emerging European countries. We provide stylised facts about the structural factors that influence market and non-market-based service, house and goods prices. The stylised facts show that there is much more behind differences in price levels among European countries than the much heralded Balassa-Samuelson effect and that prices other than those of market services are potential determinants of price levels and inflation rates in emerging Europe. Finally, we sketch out the possible mismatches between price level convergence and inflation rates.

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Sunba Dena, Neva, Suhel Suhel, and Imam Asngari. "The Factors Affecting Islamic Financing for Homeownership." Oblik i finansi, no. 3(93) (2021): 48–54. http://dx.doi.org/10.33146/2307-9878-2021-3(93)-48-54.

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Indonesia has a significant and growing shortfall of housing. Existing supply is in poor condition and demand is rising for new units. Meanwhile, people's purchasing power to buy a house is still relatively low. Government overcomes added stock housing availability by collaborating with private developers to help meet the demand for housing needs. Islamic banks can provide funds to buy houses for the community. This study analyzes the effect of third-party fund (TPF), margin of homeownership financing (PPR), inflation, and household income on Islamic financing for homeownership. The analytical model used in this research is the ordinary least square with the Error Correction Model (ECM) method. The Ordinary Least Square (OLS) method in this study is used to see the relationship between the short-term and long-term effects of the independent variables on the dependent variable. The analytical tool used in this research is Econometric Views (EViews 10 Standard Edition for Windows). The study results show that in the short term, the TPF, PPR margin, inflation, and household income variables have a significant positive effect on homeownership financing in Islamic banks in Indonesia. The long term TPF, inflation, and household income variables have a significant positive effect on homeownership financing in Islamic banks in Indonesia, but the variable of PPR margin has a significant negative impact on sharia financing for homeownership.

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Khan, Mohsin, Rup Singh, Arvind Patel, and Devendra Kumar Jain. "An examination of house price bubble in the real estate sector: the case of a small island economy – Fiji." International Journal of Housing Markets and Analysis 14, no. 4 (February 25, 2021): 745–58. http://dx.doi.org/10.1108/ijhma-05-2020-0056.

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Purpose This paper aims to assess the equilibrium house price in the city of Suva (Fiji) and to analyse the house price bubble in the Fiji housing market. Design/methodology/approach This paper adopts a time series approach to determine the presence of house price bubbles in Fiji over the period from 1988 to 2018. Findings The findings suggest that real income, land cost, building material price, inflation rate, volatility, household size and wealth have a positive impact on house prices, whereas user cost of capital and political disturbances have a negative impact. The findings further indicate that the Fijis’ housing market does not constitute any house price bubble. Practical implications This paper draws policy implications for a small developing state (Fiji) and other similar economies. Originality/value The price bubble in the Fiji housing market is analysed for the first time. This paper develops a comprehensive empirical approach to assess the equilibrium-housing price in Fiji.

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Saudin, Sharmila Binti, Nur Ashakirin Jehani, Nur Amaelya Mastani, and Isnewati Ab Malek. "A STUDY ON THE RELATIONSHIP BETWEEN HOUSE PRICE INDEX AND ITS DETERMINANTS IN MALAYSIA." MALAYSIAN JOURNAL OF COMPUTING 5, no. 2 (August 3, 2020): 515. http://dx.doi.org/10.24191/mjoc.v5i2.9466.

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In Malaysia, House Price is considered high at a certain part of the country causing the lower and middle groups unable to purchase a house. This research examines the long-run relationship and causality effect between House Price Index and determinants of House Price Index. The data was obtained from Valuation and Property Services Department (JPPH), Department of Statistics Malaysia, and Bank Negara. The data was collected over 10 years from 2010 to the first quarter of 2019. Johansen Cointegration Test and Granger Causality Test are applied in determining the long-run relationship and causality effect respectively. The general finding of this study is that the House Price Index shows an upward trend for the past nine years but slightly drop in the first quarter of 2019. This study has found that there is a long-run relationship between the House Price Index and the determinants which are Gross Domestic Product, Interest Rate, Inflation Rate, Population, and Unemployment Rate. Next, all independent variables do not granger cause House Price Index. At the same time, there is only one-way relationship found between House Price Index and Gross Domestic Product, and between House Price Index and Population where House Price Index is identified to granger cause both variables.

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Canavan, Brendan. "Displacement of Youth from the Isle of Man: The Role of House Price Inflation." Island Studies Journal 6, no. 2 (2011): 203–26. http://dx.doi.org/10.24043/isj.257.

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Small islands frequently suffer from population decline, especially of young people, putting continuity of community at risk. At the same time, their limited size can mean an intense competition for housing stock, particularly in scenic or economically successful islands which draw investors and migrants: a dynamic that fuels inflation. This paper investigates property inflation on the Isle of Man and its threat of displacing young inhabitants and upsetting social sustainability. Qualitative interviews with young Isle of Man émigrés and residents investigate the influences upon decisions to either remain on, or leave, the island. Whilst prices were not found to be significant in the decisions of those that have left, they were very much so for those who wished to remain. Those who have left claimed to have done so in order to improve their financial and personal options, but most did not necessarily want to leave. The overall result is distress, work disenchantment, family postponement and potentially, rising xenophobia.

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Courchane, Marsha J., and Cynthia Holmes. "International Real Estate Review." International Real Estate Review 17, no. 1 (April 30, 2014): 109–35. http://dx.doi.org/10.53383/100181.

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Canadian and U.S. real estate markets have compared similarly along dimensions such as inflation, mortgage interest rates, population and income growth and other measures. With respect to house prices, however, the series have moved in similar ways at some times, but then significantly diverged by the second quarter of 2007. For example, Canadian and U.S. house price indices reached essentially identical levels in 1987Q2, 1995Q1 and 2007Q2. As a consequence of the U.S. financial crisis and precipitous decline in house prices, the U.S. and Canadian indices have sharply diverged. Our paper examines whether or not the house price indices were driven by fundamentals during these time periods, or whether they diverged from fundamentals. We find that the U.S. house prices closely aligned with fundamentals until the mortgage markets crashed in 2008. We find that Canadian house prices continue to align with fundamentals. However, there have been some significant market changes between the two countries and key housing market measures indicate that Canadian markets are now moving along some paths similar to those taken by the U.S. prior to the crash.

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Adu Jack, John Kwame, Frimpong Okyere, and Emmanuel K. S. Amoah. "Effects Of Exchange Rate Volatility On Real Estate Prices In Developing Economies, A Case Of Ghana." Advances in Social Sciences Research Journal 6, no. 11 (November 24, 2019): 268–87. http://dx.doi.org/10.14738/assrj.611.7392.

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This study aims to find out whether exchange rate volatility affects real estate domestic house prices in Ghana. To this end, a 32 years secondary data from World Development Indicators (WDI) and data from Real Estate Developers in Ghana are employed for the study. The study employs Autoregressive distributed lags (ARDL) bounds testing of cointegration t o test the null hypothesis that exchange rate volatility has n o impact on real estate housing prices. The study finds that real estate price is cointegrated with remittances, exchange rate and inflation. The long run equilibrium is stable and significant. Exchange rates d o not cause changes in real estate prices in both short and long run. Similarly past prices of real estate d o not have impact on current house prices. Rather, remittances positively cause real estate prices. Inflation on its part has a negative impact on real estate prices. It is therefore concluded that, volatility in the exchange rate between the cedi and other trading currencies does not predict changes in real estate prices.

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Lim, Yoon Sang, and Kyongwook Choi. "The impact of global excess liquidity on the house prices of emerging market economies." Institute for Future Growth 8, no. 2 (December 31, 2022): 49–80. http://dx.doi.org/10.29143/kuifg.2022.8.2.49.

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This paper analyzes the impact of global excess liquidity, which is caused by unconventional monetary policies of major advanced economies (AE), on the house prices of emerging market economies (EME). The founding says that global excess liquidity, real GDP growth rate, CPI inflation, inter-bank interest rate and base money growth rate mainly affect the house prices of EME during the entire period. But non-linearity, in which the impact of each independent variable on the dependent variable is different between the non-crisis and crisis period, is not clear. Hence, we divide the entire period into two periods, one being “before global financial crisis (GFC)” and the other “after GFC”, to find out whether the behavior of major explanatory variables changes or not. The results say that before GFC, global excess liquidity, real GDP growth rate, CPI inflation, and base money growth rate affected house prices. But after GFC, only real GDP growth rate and base money growth rate affected it while global excess liquidity did not. We put additional variables, “synchronization of monetary policies between AE and EME” and “shares of cross-border claims of international banks”, into our econometric models in order to find out causes of the results above. We found that synchronization of monetary policies between AE and EME affected (it) but shares of cross-border claims of international banks did not.

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ALKAN, Ufuk. "Main determinants of house prices: Effects of construction cost and house sales to foreigners." Business & Management Studies: An International Journal 10, no. 4 (December 25, 2022): 1512–28. http://dx.doi.org/10.15295/bmij.v10i4.2159.

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Housing prices have increased worldwide with the increase in commodity prices. They have become a primary investment tool most consumers prefer, especially to protect themselves from inflation. One of the main questions is which macroeconomic factors affect the housing price index, especially the increase in the number of houses sold to foreigners and the increase in construction costs. The study will answer whether the increase in housing costs or the increase in sales to foreigners causes an increase in housing prices. The variables in the study consist of macroeconomic variables that were mostly included in previous studies. Data from January 2015 to March 2022 consisted of 87-period data. Time series analysis has been tried to be explained with the help of the ARDL model by performing a boundary test. In the model, all variables were significant, but a long-term relationship was found, not a short-term one. Tests have demonstrated the model's accuracy for deviation from basic assumptions and structural break tests. Taking the logarithms of the variables in the model makes it possible to interpret them flexibly. In this context, contrary to expectations, it was determined that house sales to foreigners decreased the house price index, and the biggest reason for the increase in house prices was the cost increases that took place worldwide. Other variables that increase and decrease the housing price index are interpreted, and suggestions are made to solve the housing problem. It is considered that the model gives an idea to understand the increase in housing prices, but other social factors should also be considered for housing demand.

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Journal articles on the topic 'House inflation'

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