Macroeconomic Determinants of Housing Prices: A Cross Country Level Analysis

Tripathi, Sabyasachi (2019): Macroeconomic Determinants of Housing Prices: A Cross Country Level Analysis.

Abstract

The paper investigates the macroeconomic determinants of rising housing prices from a cross country perspective. The random-effect models’ analysis suggests that rent, price-to-income ratio, price-to-rent ratio, urbanization, per-capita GDP, inflation, the share of population aged 15-64, GDP growth rate, broad money, and real exchange rate have a positive and statistically significant effect on real house prices. In contrast, the percentage share of employment in services has a negative effect on real house prices. We suggest that government should adjust macroeconomic policies such as inflation, broad money supply, real exchange rate, urbanization, and employment dynamics to control the real house prices.

• Item Type: MPRA Paper
• Language: English
• Keywords: Real house prices, macroeconomy, random effect models, cross countries
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E39 - Other; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy

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