A Model of the Australian Housing Market

Trent Saunders and Peter Tulip
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Trent Saunders: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: We build an empirical model of the Australian housing market that quantifies interrelationships between construction, vacancies, rents and prices. We find that low interest rates (partly reflecting lower world long-term rates) explain much of the rapid growth in housing prices and construction over the past few years. Another demand factor, high immigration, also helps explain the tight housing market and rapid growth in rents in the late 2000s. A large part of the effect of interest rates on dwelling investment, and hence GDP, works through housing prices.

Keywords: housing; construction; house prices; vacancies; rents (search for similar items in EconPapers)
JEL-codes: E17 R30 R31 (search for similar items in EconPapers)
Date: 2019-03
New Economics Papers: this item is included in nep-mac and nep-ure
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Citations: View citations in EconPapers (6)

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