Real State as Housing and as Financial Investment: A First Assessment for Argentina

Ricardo Bebczuk () and Maria Lorena Garegnani

IIE, Working Papers from IIE, Universidad Nacional de La Plata

Abstract: There exists a widespread perception that Argentine households channel a large share of their savings into real state. However, no hard evidence has produced to date to measure how important this saving behavior is for the determination of housing prices vis-à-vis the traditional housing motive to buy property. In this light, this paper assesses for the first time whether housing prices in Argentina are mostly driven by housing or by investment motives. To this end, we devised a simple empirical test taking the form of an Equilibrium Correction model of apartment prices in Buenos Aires City on four explanatory variables that separately capture the housing motive (affordability and mortgage loans) and the investment motive (private bank deposits and income). It is found that private bank deposits and income have strong long and short run effects on housing prices behavior. Affordability only shows a short run effect, while mortgage loans turn out to be non-significant. These findings suggest, in line with the popular view on this topic, that real state fulfills a prominent role as a financial investment in Argentina.

Keywords: Housing demand; Financial investment; Equilibrium Correction model. (search for similar items in EconPapers)
JEL-codes: C32 G21 R21 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2012-11
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.depeco.econo.unlp.edu.ar/wp/wp-content/uploads/2017/05/doc95.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Working Paper: Real State as Housing and as Financial Investment: A First Assessment for Argentina (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:akh:wpaper:095

Access Statistics for this paper

More papers in IIE, Working Papers from IIE, Universidad Nacional de La Plata Contact information at EDIRC.
Bibliographic data for series maintained by Laura Carella ().