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Canadian City Housing Prices and Urban Market Segmentation

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Author Info

  • Jason Allen
  • Robert Amano
  • David P. Byrne
  • Allen W. Gregory

Abstract

The authors provide a detailed empirical analysis of Canadian city housing prices. They examine the long-run relationship between city house prices in Canada from 1981 to 2005 as well as idiosyncratic relations between city prices and city-specific variables. The results suggest that city house prices are only weakly correlated in the long run, and that there is a disconnect between house prices and interest rates. City-specific variables such as union wage levels, new-housing prices, and the issuance of building permits tend to be positively related to city existing-house prices. Surprisingly, there is mixed evidence with respect to standard measures of economic activity, such as labour force and per capita GDP.

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Bibliographic Info

Paper provided by Bank of Canada in its series Working Papers with number 06-49.

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Length: 28 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:bca:bocawp:06-49

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Keywords: Regional economic developments;

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References

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  1. Muellbauer, John & Murphy, Anthony, 1997. "Booms and Busts in the UK Housing Market," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1615, C.E.P.R. Discussion Papers.
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  4. Elizabeth Wakerly & Byron Scott & James Nason, 2006. "Common trends and common cycles in Canada: who knew so much has been going on?," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 320-347, February.
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  6. Cheung, Yin-Wong & Lai, Kon S, 1993. "Finite-Sample Sizes of Johansen's Likelihood Ration Tests for Conintegration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(3), pages 313-28, August.
  7. Greg Tkacz & Carolyn Wilkins, 2006. "Linear and Threshold Forecasts of Output and Inflation with Stock and Housing Prices," Working Papers, Bank of Canada 06-25, Bank of Canada.
  8. Case, Karl E & Shiller, Robert J, 1989. "The Efficiency of the Market for Single-Family Homes," American Economic Review, American Economic Association, vol. 79(1), pages 125-37, March.
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  10. Jack Selody & Carolyn Wilkins, 2004. "Asset Prices and Monetary Policy: A Canadian Perspective on the Issues," Bank of Canada Review, Bank of Canada, vol. 2004(Autumn), pages 3-14.
  11. Saikkonen, Pentti, 1991. "Asymptotically Efficient Estimation of Cointegration Regressions," Econometric Theory, Cambridge University Press, vol. 7(01), pages 1-21, March.
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  14. Englund, Peter & Ioannides, Yannis M., 1997. "House Price Dynamics: An International Empirical Perspective," Journal of Housing Economics, Elsevier, Elsevier, vol. 6(2), pages 119-136, June.
  15. repec:cup:etheor:v:7:y:1991:i:1:p:1-21 is not listed on IDEAS
  16. Fratantoni, Michael & Schuh, Scott, 2003. " Monetary Policy, Housing, and Heterogeneous Regional Markets," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 35(4), pages 557-89, August.
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Citations

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Cited by:
  1. Rose Cunningham & Ilan Kolet, 2007. "Housing Market Cycles and Duration Dependence in the United States and Canada," Working Papers, Bank of Canada 07-2, Bank of Canada.
  2. Jason Allen & Darcey McVanel, 2009. "Price Movements in the Canadian Residential Mortgage Market," Working Papers, Bank of Canada 09-13, Bank of Canada.
  3. Allen Head & Huw Lloyd-Ellis & Hongfei Sun, 2012. "Search, Liquidity and the Dynamics of House Prices and Construction," Working Papers, Queen's University, Department of Economics 1276, Queen's University, Department of Economics.
  4. Marsha J. Courchane & Cynthia Holmes, 2014. "Bubble, Bubble ¡V Is there House Price Trouble -- in Canada?," International Real Estate Review, Asian Real Estate Society, Asian Real Estate Society, vol. 17(1), pages 109-135.
  5. Evridiki Tsounta, 2009. "Is the Canadian Housing Market Overvalued? A+L4242 Post-Crisis Assessment," IMF Working Papers 09/235, International Monetary Fund.
  6. Tse, Chin-Bun & Rodgers, Timothy & Niklewski, Jacek, 2014. "The 2007 financial crisis and the UK residential housing market: Did the relationship between interest rates and house prices change?," Economic Modelling, Elsevier, vol. 37(C), pages 518-530.
  7. Luis M. Cubeddu & Camilo Ernesto Tovar Mora & Evridiki Tsounta, 2012. "Latin America," IMF Working Papers 12/193, International Monetary Fund.
  8. Tomura, Hajime, 2010. "International capital flows and expectation-driven boom-bust cycles in the housing market," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 34(10), pages 1993-2009, October.
  9. Islam, Shahidul, 2007. "Neighbourhood Characteristics and Adjacent Ravines on House Prices," Annual Meeting, July 29-August 1, 2007, Portland, Oregon, Canadian Agricultural Economics Society 10250, Canadian Agricultural Economics Society.
  10. Hajime Tomura, 2008. "A Model of Housing Boom and Bust in a Small Open Economy," Working Papers, Bank of Canada 08-9, Bank of Canada.

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