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House price affordability, the global financial crisis and the (ir)relevance of mortgage rates

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  • Graham Squires
  • Don J. Webber

Abstract

Although house prices and wages are both influenced by distinct factors that shape their own evolutions, they are also intrinsically connected through house price affordability. Further, macroeconomic policies centred around adjustments in the mortgage rate are of prime importance in ensuring that the housing market does not overheat. This study contributes to the understanding of the link between housing market affordability and mortgage rates by investigating this association across regions of New Zealand using quarterly data between 2000 and 2017. Applications of trajectory regression reveal that the global financial crisis affected regional house price affordability asymmetrically and there was no statistically significant correlation between house price affordability and mortgage rates.

Suggested Citation

  • Graham Squires & Don J. Webber, 2019. "House price affordability, the global financial crisis and the (ir)relevance of mortgage rates," Regional Studies, Regional Science, Taylor & Francis Journals, vol. 6(1), pages 405-420, January.
    • Handle: RePEc:taf:rsrsxx:v:6:y:2019:i:1:p:405-420
    DOI: 10.1080/21681376.2019.1643777
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    Cited by:

    1. Squires, Graham & Hutchison, Norman, 2021. "Barriers to affordable housing on brownfield sites," Land Use Policy, Elsevier, vol. 102(C).

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