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Foreign investment in Australian residential properties

Author

Listed:
  • Hassan F. Gholipour
  • Hooi Hooi Lean
  • Reza Tajaddini
  • Anh Khoi Pham

Abstract

Purpose - The purpose of this study is to examine the impact that foreign investment in existing houses and new housing development has on residential house prices and the growth of the housing construction sector. Design/methodology/approach - The analysis is based on a panel cointegration method, estimated using annual data for all Australian states and territories spanning the period of 1990-2013. Findings - The results indicate that increases in foreign investment in existing houses do not significantly lead to increases in house prices. On the other hand, a 10 per cent increase in foreign investment for housing development decreases house prices by 1.95 per cent. We also find that foreign real estate investments have a positive impact on housing construction activities in the long run. Originality/value - Existing studies used aggregate foreign real estate investment in their analyses. As foreign investment in existing houses and foreign investment for housing development have different impacts on the demand and supply sides of housing market, it is crucial that the analysis of the effects of foreign investment in residential properties on real estate market is conducted for each type differently.

Suggested Citation

  • Hassan F. Gholipour & Hooi Hooi Lean & Reza Tajaddini & Anh Khoi Pham, 2019. "Foreign investment in Australian residential properties," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 12(2), pages 166-180, March.
    • Handle: RePEc:eme:ijhmap:ijhma-05-2018-0030
    DOI: 10.1108/IJHMA-05-2018-0030
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    Citations

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    Cited by:

    1. Nur Sabrina Abdul Latif & Khawaja Muhammad Rizwan Majeed & Nabilah Rozzani & Siti Khadijah Saleh, 2020. "Factors Affecting Housing Prices in Malaysia: A Literature Review," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 10(1), pages 63-68, January.

    More about this item

    Keywords

    Australia; Construction; Foreign investment; Panel cointegration; House prices; Construction costs; F41; F21; G12;
    All these keywords.

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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