Housing Price, Mortgage Interest Rate and Immigration

Chong Fennee ()
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Chong Fennee: Office of Research and Innovation, Charles Darwin University

Real Estate Management and Valuation, 2020, vol. 28, issue 3, 36-44

Abstract: Housing price in New Zealand has appreciated substantially after the Global Financial Crisis, resulting in an affordability problem for first home buyers. This paper studies whether changes in immigration activity and mortgage interest rate influence housing price. Empirical findings derived using VECM confirm the impact of immigration and mortgage interest rate on housing property price. Both variables explain 11.4 percent of the variation of Housing Index. An increase of 1 percent in mortgage interest rate would reduce the housing index movement by 1.44 percent whilst a 1 percent increase in immigrants would increase the housing index by 0.30 percent. In addition, about 2 percent of the short-run deviations of housing prices are adjusted towards the long-run equilibrium each month.

Keywords: housing price; mortgage interest rate; immigration (search for similar items in EconPapers)
JEL-codes: E52 J11 R31 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:vrs:remava:v:28:y:2020:i:3:p:36-44:n:4

DOI: 10.1515/remav-2020-0022

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