Do stock prices affect house prices? Evidence for the Netherlands

Kakes, Jan; End, Jan Willem van den

doi:10.1080/1350485042000254863

Cited by 51 publications

(39 citation statements)

References 2 publications

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“…It shows that both household wealth and financial wealth adjust for about 40 per cent to stock market capitalization developments in the long run. This is consistent with Sutton (2002) and Kakes and Van den End (2004) who find a strong impact of stock prices on house prices. Subsample results and stability tests show that the long‐run adjustment of wealth to stock market capitalization has been robust.…”

Section: Datasupporting

confidence: 91%

New Evidence on the Motives for Holding Euro Area Money

Bondt

2010

The Manchester School

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This study focuses on the role of equity and labour markets for holding euro area money. Equity affects money demand positively through wealth effects (financial transaction motive) and negatively via substitution effects from the expected return on equity (speculative motive). A precautionary motive is captured by the annual change in the unemployment rate. The empirical results show that equity and labour markets do matter for euro area money demand since 1983. This finding is robust across different proxies for the augmented motives and a shorter sample starting in 1994. Copyright � 2010 The Author. Journal compilation � 2010 Blackwell Publishing Ltd and The University of Manchester.

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Section: Datasupporting

confidence: 91%

New Evidence on the Motives for Holding Euro Area Money

Bondt

2010

The Manchester School

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“…Several reservations were made. Firstly, the stock market could affect real estate through national income (Sutton, 2002); secondly, the effects could be most pronounced in the expensive segment of the property market (Kakes & Van Den End, 2004); thirdly, in some cases the effects on the stock market could be short-term in nature (Leung et al, 2008), whilst in other cases, the long-run cointegration between the two markets could be present (Takala & Pere, 1991); and fourthly, contemporaneous relations between the two markets could be absent (Quan & Titman, 1999). Chen et al (2007) argue that the cost of construction, the cost of land, and seasonal factors were the principal determinants of Malaysian residential property prices.…”

Section: Literature Reviewmentioning

confidence: 99%

Macroeconomic and Demographic Determinants of Residential Property Prices in Malaysia

Trofimov

Aris

Xuan³

2018

Zagreb International Review of Economics and Business

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This paper studies the relationship between residential property prices and macroeconomic and demographic determinants in Malaysia. In the years following the Asian financial crisis, property prices in Malaysia rose substantially, resulting in an affordability crisis and ultimately policy responses to the problem. Using unit root, Johansen-Juselius cointegration, VECM-based Granger causality tests and variance decomposition, and considering quarterly data that covers 2000-2015 period, we established that residential property price growth is principally driven by strong demographic performance and population growth and is backed by the low interest rate environment and rising consumer prices. Household income and level of GDP do not appear to contribute to property price growth. Certain distortions and asymmetries in the Malaysian real estate markets are documented: oversupply in the higher price segment of the market coupled with the lack of affordable housing in the lower price segment; household income growth lagging behind GDP and property price growth, thereby dampening housing demand; growing rental markets in major urban areas as a result of the affordability crisis; and a quality mismatch between buyers’ preferences and housing supply.

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“…One set of studies has examined the short-run dynamics between house prices and stock prices using Granger causality or impulse response functions. There are studies by Chen (2001), using Taiwanese data; Takala and Pere (1991), using Finnish data; Green (2002), using data from four geographic regions in California with different housing prices; Kakes and Van Den End (2004), using data from the Netherlands; and Kapopoulos and Siokis (2005), using data from Greece. Sutton (2002) examined the short-run dynamics between housing prices and stock prices for Australia, Canada, the United Kingdom, the United States, Ireland and Netherlands using Granger causality testing.…”

Section: Existing Literaturementioning

confidence: 99%

Dynamic Interaction Between House Prices and Stock Prices in Malaysia

Smyth

2014

International Journal of Strategic Property Management

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This paper examines the dynamic linkages between house price indices, interest rates and stock prices in Malaysia using cointegration and Granger causality testing. For Malaysia as a whole, we find that house prices, stock prices and interest rates are not cointegrated. For Kuala Lumpur, Penang and Selangor we find that house prices, stock prices and interest rates are cointegrated for 40% of the house price indices. When there is evidence of cointegration in these regions, we find that stock prices lead house prices. While there are alternative potential reasons for this finding, such as slow adjustment of house prices in response to a shock in the fundamentals, it is consistent with a wealth effect. A likely explanation for this result is that in these states, compared with the Malaysian average, housing is expensive, income is high and real estate is used much more as an investment vehicle by both wealthy Malaysians and foreigners leveraging of the share market.

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Do stock prices affect house prices? Evidence for the Netherlands

Cited by 51 publications

References 2 publications

New Evidence on the Motives for Holding Euro Area Money

New Evidence on the Motives for Holding Euro Area Money

Macroeconomic and Demographic Determinants of Residential Property Prices in Malaysia

Dynamic Interaction Between House Prices and Stock Prices in Malaysia

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