Housing Market Dynamics and the GFC: The Complex Dynamics of a Credit Shock

Arthur Grimes and Sean Hyland ()
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Sean Hyland: Motu Economic and Public Policy Research

No 13_12, Working Papers from Motu Economic and Public Policy Research

Abstract: We analyse the multiple channels of influence that GFC-induced credit restrictions had on New Zealand’s subnational housing markets. Our model isolates dynamics caused by impacts on the supply and the demand sides of the market. These dynamics are compared to those caused by a migration shock, a more common form of housing shock in New Zealand. We focus on the impacts on two outcome variables: house prices and housing supply; both shocks cause substantial cyclical adjustments in each variable. Similar cyclical dynamics could complicate the conduct of macro-prudential policies which are designed to affect bank credit allocation.

Keywords: House prices; housing supply; credit restrictions; GFC; migration (search for similar items in EconPapers)
JEL-codes: E51 R21 R31 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2013-10
New Economics Papers: this item is included in nep-ban, nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:mtu:wpaper:13_12

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