The relation between supply constraints and house price dynamics in the Netherlands
Dorinth van Dijk,
Frank van Hoenselaar () and
DNB Working Papers from Netherlands Central Bank, Research Department
We analyze the effect of supply constraints on the dynamics of house prices in the Netherlands. In particular, we look at whether income shocks lead to stronger house price increases in regions characterized with higher supply constraints. We use a panel dataset that contains 316 municipalities over the years 1987-2016. Municipalities are divided in three equally sized groups according to the extent of supply constraints present in each municipality. Our results suggest that income shocks lead to significantly larger increases in house prices in municipalities that are relatively more supply constrained. This holds both in the short- and the long-term. The degree of mean reversion and persistence, however, do not seem to significantly differ between the three groups of municipalities.
Keywords: house prices; income shocks; supply constraints (search for similar items in EconPapers)
JEL-codes: G12 R31 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:dnb:dnbwpp:601
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