<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Housing price in New Zealand has appreciated substantially after the Global Financial Crisis, resulting in an affordability problem for first home buyers. This paper studies whether changes in immigration activity and mortgage interest rate influence housing price. Empirical findings derived using VECM confirm the impact of immigration and mortgage interest rate on housing property price. Both variables explain 11.4 percent of the variation of Housing Index. An increase of 1 percent in mortgage interest rate would reduce the housing index movement by 1.44 percent whilst a 1 percent increase in immigrants would increase the housing index by 0.30 percent. In addition, about 2 percent of the short-run deviations of housing prices are adjusted towards the long-run equilibrium each month.</p></abstract>

Housing price in New Zealand has appreciated substantially after the Global Financial Crisis, resulting in an affordability problem for first home buyers. This paper studies whether changes in immigration activity and mortgage interest rate influence housing price. Empirical findings derived using VECM confirm the impact of immigration and mortgage interest rate on housing property price. Both variables explain 11.4 percent of the variation of Housing Index. An increase of 1 percent in mortgage interest rate would reduce the housing index movement by 1.44 percent whilst a 1 percent increase in immigrants would increase the housing index by 0.30 percent. In addition, about 2 percent of the short-run deviations of housing prices are adjusted towards the long-run equilibrium each month.

Housing Price, Mortgage Interest Rate and Immigration

Real Estate Management and Valuation

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

{"article-title":"Housing Price, Mortgage Interest Rate and Immigration"}

Housing price in New Zealand has appreciated substantially after the Global Financial Crisis, resulting in an affordability problem for first home buyers. This...

Housing Price, Mortgage Interest Rate and Immigration

Published Online: Aug 17, 2020

Page range: 36 - 44

DOI: https://doi.org/10.1515/remav-2020-0022

Keywords
housing price, mortgage interest rate, immigration

© 2020 Fennee Chong, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Housing Price, Mortgage Interest Rate and Immigration

Published Online: Aug 17, 2020

Page range: 36 - 44

DOI: https://doi.org/10.1515/remav-2020-0022

Keywordshousing price, mortgage interest rate, immigration

© 2020 Fennee Chong, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
housing price, mortgage interest rate, immigration