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Discovering key drivers of house price growth in eight Australian capital cities:1994-2017

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posted on 28.03.2022, 03:13 authored by Aaron Ding
This study adopts the user cost of housing framework and uses dynamic models to identify the key drivers of real house price growth in Australia's eight capital cities between 1994 and 2017. The real mortgage rate and the real investment loan growth rate are found to be significantly associated with real house price growth. A 25 basis points increase in the real mortgage rate will reduce the long-run growth rate of real house price in Sydney by about 0.69 per cent per quarter. A 1 percent increase in investment loan growth per quarter will increase the long-run real house price growth by 0.95 per cent per quarter in Sydney. The results show that investor demands have a lot more influence on house price growth than compared to owner-occupied demands in most Australian capital cities.The study also discovers that the price-to-rent ratio and population growth have strong influences on real house price growth. For most Australian Capital cities, economic factors explain around 50 t0 60 per cent of the variation i the growth rate of house prices.

History

Table of Contents

1. Introduction -- 2. The user cost model -- 3. Data -- 4. Results -- 5. Further discussion -- 6. Conclusion -- Appendix.

Notes

Bibliography: pages 41-42 Empirical thesis.

Awarding Institution

Macquarie University

Degree Type

Thesis MRes

Degree

MRes, Macquarie University, Faculty of Business and Economics, Department of Economics

Department, Centre or School

Department of Economics

Year of Award

2018

Principal Supervisor

Jeffrey R. Sheen

Additional Supervisor 1

Ben Zhe Wang

Rights

Copyright Aaron Ding 2018. Copyright disclaimer: http://mq.edu.au/library/copyright

Language

English

Jurisdiction

Australia

Extent

1 online resource (43 pages) graphs, tables

Former Identifiers

mq:71264 http://hdl.handle.net/1959.14/1272519