Oil inflows and housing market fluctuations in an oil-exporting country: Evidence from Iran

The impact of oil shocks on the housing market: Evidence from Canada and U.S

“…This increase in mortgage delinquency is associated with falling home prices, an increase in household expenditures on energy, and rising unemployment. Khiabani (2015) focuses on identifying the channels for the transmission of oil price and credit shocks to the housing sector in the Iranian market. The findings indicate that oil price shocks explain a substantial part of housing market fluctuations in Iran.…”

“…The main advantage of our SVAR approach over previous work (e.g., Chan et al, 2011;Antonakakis et al, 2016;Breitenfellner et al, 2015;Khiabani, 2015) is that the identification structure allows us to assess the impact of higher crude oil prices differentiating the demand and supply shocks, along with the relative importance of these shocks over time. In addition, previous studies treat oil as exogenous with respect to the real estate market.…”

“…Khiabani (2015) points out that in the last decade, many oil exporting countries have experienced an unusually sharp increase in housing prices which is accompanied by a period of high oil inflows in these countries. Interestingly, the direct relationship between world oil supply and housing prices is much stronger in Canadian (a net oil exporter) compared to the U.S. (a net oil importer) in our sample data as seen in Figure 1.…”

“…Antonakakis et al, 2016;Breitenfellner et al, 2015;and Khiabani, 2015). The current literature generally suggests that increases in oil prices negatively impact the real estate market.…”

“…The implication is that the oil user sector benefits from increased oil price volatility once the oil price level is accounted for. Khiabani (2015) posits that oil windfalls to oil-exporting countries commonly leads to the accumulation of foreign reserves. A non-sterilization of these reserves potentially expands the country's monetary base which may prompt an increase in the price of non-tradable goods (including housing) and an appreciation of real exchange rates.…”