Housing market and demography, evidence from French panel data

Abstract

Purpose -Worldwide variations in the population structure are taking place over the next century, and this is expected to have impacts on the whole economic systems, and particularly on the housing market (i.e. price of homes, ownership structure, and supply and demand of residential properties). In this paper, we empirically investigate how the French real estate is affected by both economic and demographic factors.Design/methodology/approach -Starting from the theoretical benchmark model of Takàts (2012), we fist investigate the relationship between collective and individual housing prices dynamics and GDP, total population and old age dependency ratio. Findings -Results from fixed effect regressions on 94 French departments on the period 2000-2013show that real estate prices are significantly and positively affected by the total population number and the total GDP, while they are significantly and negatively affected by the old age dependency ratio (ratio of population aged 60+ to the working population). Furthermore, obtained results and the particular case of France have motivated further research by enriching the baseline model with various financial, real estate, economic and demographic explanatory variables and analyzing our panel in a more segmented way. In all cases, economic impact on real estate market is significant and around the unit_ i.e. 1% increase in GDP leads a 1% increase in housing prices_ while demographic factors seem to have a greater impact on housing market prices. Research limitations/implications -This paper is essentially exploratory and raises a number of questions for further investigation. There is scope to address the research questions using longer data series, which would allow us to study long run relationship between all the factors studied. There is also scope to extend the research to explore and characterize the interactions between key departments of the whole French real estate market.Originality/value -This study, to our knowledge, is conducted for the first time across departments in France.

Cointegrations in house price dynamics and ageing population risks

“…Effects of demographic changes on housing prices are well documented in the literature [3,9,[18][19][20][21][22][23]. House prices increase with baby boom and decrease with baby bust generation [3].…”

Spatial Analysis of Housing Prices and Market Activity with the Geographically Weighted Regression

“…Special attention has been paid in many papers to demographic factors, which include age, gender, marital status and which also affect the housing needs, etc. [5][6][7][8][9]. The demographic situation may change as a result of migration both between countries, regions and individual towns.…”

“…It was assumed that these variables should reflect socio-demographic, economic and environmental conditions. The importance of variables X 1 -X 3 is emphasised by many authors, among others, Engelhardt et al [7] and Essafi and Simon [8]. The adoption of the variable X 4 results, among others, from research presented by Magnusson and Turner [10].…”

Artificial intelligence for greater transparency in housing price estimation

“…This can lead to inflated asking prices and bubbles (Glaesner & Nathanson, 2015). The consequences are often stigmatizing neighbourhoods, segregation, and gentrification (DeSilva et al, 2012, Engelhardt, 1991, Essafi & Simon, 2015, Fuller et al, 2020, Guerrieri et al, 2013.…”