Effect of ageing on housing prices: A perspective from an overlapping generation model

Tianyu Sun, Satish Chand and Keiran Sharpe

Research in Economics, 2024, vol. 78, issue 3

Abstract: This paper suggests that ageing has divergent effects on housing prices, and the divergence sources from both aspects of ageing and housing. For the ageing, a fall in fertility and a rise in survival rate could have opposite effects on housing prices. For the housing, the prices of the two components – land and structure – respond to fertility rate decline and survival rate increase to different extent. Therefore, the effect of ageing on housing prices does not have a definite pattern in the long run. In the short run, the results suggest that ageing can produce a turning point in the price dynamics. To the left of the peak, ageing boosts prices while to the right, it has the opposite effect, therefore the impacts of ageing on housing prices are different with time.

Keywords: Ageing population; OLG model; House prices; Land prices; Turning point (search for similar items in EconPapers)
JEL-codes: E21 E31 J11 R21 R31 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:78:y:2024:i:3:s1090944324000243

DOI: 10.1016/j.rie.2024.100960

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