House prices and unemployment: an empirical analysis of causality

Irandoust, Manuchehr

doi:10.1108/ijhma-03-2018-0021

Cited by 21 publications

(15 citation statements)

References 54 publications

(54 reference statements)

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“…Additionally, a positive shock of unemployment Granger causes a negative shock of the housing price index. However, the finding did not reveal the feedback relationship between unemployment and housing price index in contrast to the study of Irandoust ( 2019 ) for Germany. We conclude that positive shocks of world pandemic uncertainty and declines in oil price and unemployment have a significant predictive power for decreases in the housing price index in Germany.…”

Section: Resultscontrasting

confidence: 99%

Testing the asymmetric causal nexus of housing-oil prices and pandemic uncertainty in four major economies

Alola

Uzuner

2021

Environ Sci Pollut Res

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The spread of COVID-19 worldwide has shown how quick global economy can become affected when ones’ health and future are at risk. This paper examines the evidence of Granger causality among the housing price, the unemployment rate, crude oil price, and world pandemic uncertainty in France, Germany, the UK, and the USA over the period 1996Q1–2019Q2. In this case, the linear and asymmetric Granger causality approaches of Toda-Yamamoto and Hatemi-J are respectively applied to provide useful insight. Although only significant evidence of linear Granger causality is found among the unemployment rate and the house prices in all the four economies, the investigations revealed asymmetric evidence involving the world pandemic uncertainty. Specifically, there is a significant uni-directional asymmetric Granger causality from the world pandemic uncertainty to the house price in France, Germany, and the USA but not in the UK. The variation in the results among the examined countries is explained by potential differences in economic structures or business cycle and other social and economic factors. Thus, relevant policy guidance is implied from the results especially for the policymakers in the examined countries.

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Section: Resultscontrasting

confidence: 99%

Testing the asymmetric causal nexus of housing-oil prices and pandemic uncertainty in four major economies

Alola

Uzuner

2021

Environ Sci Pollut Res

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“…According to their results, variables such as employment, production and money supply affect house prices: they observed that an increase in the short-term interest rate affects housing prices positively contrary to an increase in the longterm interest rate. Lerbs (2011) confirms Oswald's hypothesis, which states that there is positive partial link between homeownership and unemployment; see also Irandoust (2019). Rahman et al (2012) employ OLS regression for a 20-year period for the Chinese city, Hangzhou; they find that saving deposits of urban residents, household disposable income, urbanization rate and investment in housing industry and foreign direct investment are the main variables which affect the Hangzhou's housing prices.…”

Section: Literature Reviewmentioning

confidence: 57%

Real estate development in the city of Athens during the financial crisis

Nikitidou

Archontakis

Tagkalakis

2021

JERER

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Purpose This study aims to determine how the prices of residential properties in the Greek real estate sector are affected by their structural characteristics and by the prevailing economic factors during recession. Design/methodology/approach Based on 13,835 valuation reports for the city of Athens, covering a period of 11 years (2006–2016), this study develops a series of econometric models, taking into account both structural characteristics of the property market and the macroeconomic relevant variables. Finally, the city of Athens is divided into sub-regions and the different effects of the structural factors in each area are investigated via spatial analysis confirming the validity of the baseline model. Findings Findings show that the size, age, level, parking and storage space can explain the property price movements. Moreover, the authors find evidence that it is primarily house demand variables (e.g. the annual average wage, the unemployment rate, the user cost of capital, financing constraints and expectations about the future course of the house market) that affect house prices in a statistically significant manner and with the correct sign. Finally, using a difference-in-differences approach, this study finds that an increase in house demand (on account of net migration) led to higher house prices in smaller and older than in larger and younger apartments in areas with high concentration of immigrants. Originality/value This study uses a novel data set to help entities, individuals and policy-makers to understand how the recent economic and financial crisis has affected the real estate market in Athens.

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“…Indeed, as theoretically discussed by Li et al (2018) rising unemployment level would be negatively affecting housing prices and housing demand would decrease as the unemployed individuals would not have a guaranteed income or fulfill the required conditions to be able to borrow for housing purchases. Irandoust (2019) considers that a rise in unemployment leads to a decrease in consumption, more so in the housing market and this entails a decrease in housing demand and prices. Unemployed individuals might also be unable to make debt repayment, leading to foreclosures or sales of the houses at lower prices.…”

Section: Methodology and Analysismentioning

confidence: 99%

Does immigration affect residential real estate prices? Evidence from Australia

Gopy-Ramdhany

Seetanah

2021

IJHMA

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Purpose This study aims to investigate the effect of immigration on housing prices in Australia both at the national and regional levels. Design/methodology/approach Data for eight Australian states on a quarterly basis from 2004–2017 is used. To study the possible dynamic and endogenous relationship between housing prices and immigration, a panel vector autoregressive error correction model (PVECM) is adopted. Findings Analysis of the results indicates that in the short run immigration positively and significantly affects housing prices, whereas in the long run no significant relationship was observed between the two variables. From the regional breakdown and analysis, it is discerned that in some states there is a significant and positive effect of immigration on residential real estate prices in the long run. Causality analysis confirms that the direction of causation is from immigration to housing prices. Practical implications The study illustrates that immigration and interstate migration, as well as high salaries, have been causing a rise in housing demand and subsequently housing prices. To monitor exceedingly high housing prices, local authorities should be controlling migration and salary levels. Originality/value Past research studies had highlighted the importance of native interstate migration in explaining the nexus between immigration – housing prices. In this study, it has been empirically verified how immigration has been affecting the locational decisions of natives and subsequently how this has been affecting housing prices.

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House prices and unemployment: an empirical analysis of causality

Cited by 21 publications

References 54 publications

Testing the asymmetric causal nexus of housing-oil prices and pandemic uncertainty in four major economies

Testing the asymmetric causal nexus of housing-oil prices and pandemic uncertainty in four major economies

Real estate development in the city of Athens during the financial crisis

Does immigration affect residential real estate prices? Evidence from Australia

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