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Population aging and housing prices: who are we calling old?

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  • Ye Jin Heo

    (Graduate Institute of International and Development Studies)

Abstract

This paper empirically studies through which channel - between short expected remaining life and withdrawal from the labor market - population aging affects real house price more and how the effect can vary if old-age population is defined alternatively in a way to reflect different aspects of aging, using a panel data of OECD countries. It finds that the main driver of a negative relationship between aging and real house price comes from the later stage of life and not immediately after the age of 65 or retirement. It also shows that the effective retirement age matters more in explaining the relationship between aging and real house price than the age 65, since the share of retired population has a nonlinear effect on real house price, while the standard old-age population aged over 65 does not. When I project future real house price, the standard old-age population only predicts a further decrease in real house price as aging continues, whereas the retired population captures a positive marginal effect and leaves room for policy intervention.

Suggested Citation

  • Ye Jin Heo, 2018. "Population aging and housing prices: who are we calling old?," NBP Working Papers 288, Narodowy Bank Polski.
    • Handle: RePEc:nbp:nbpmis:288
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    References listed on IDEAS

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    More about this item

    Keywords

    J11; G12; R21;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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