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Long-run Supply and Demand Elasticities in the Spanish Housing Market

Author

Listed:
  • Maria Arrazola

    (Universidad Rey Juan Carlos)

  • Jose de Hevia

    (Universidad Rey Juan Carlos)

  • Desiderio Romero-Jordan

    (Universidad Rey Juan Carlos)

  • Jose Felix Sanz-Sanz

    (Universidad Complutense de Madrid)

Abstract

This paper analyses housing supply and demand in Spain. Using data for 1975 to 2009, reduced form and structural models are estimated. The results show that faced with situations of disequilibrium prices adjust more rapidly than stock. Similarly, they demonstrate that demand shows low sensitivity to variations in prices and real interest rates. By contrast, it’s highly sensitive to demographic changes and the evolution of the labor market. The evidence confirms that permanent income has greater weight than prices as a determinant of demand. On the contrary, supply is highly sensitive to variations in prices and interest rates.

Suggested Citation

  • Maria Arrazola & Jose de Hevia & Desiderio Romero-Jordan & Jose Felix Sanz-Sanz, 2015. "Long-run Supply and Demand Elasticities in the Spanish Housing Market," Journal of Real Estate Research, American Real Estate Society, vol. 37(3), pages 371-404.
    • Handle: RePEc:jre:issued:v:37:n:3:2015:p:371-404
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    Citations

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    Cited by:

    1. Corinna Ghirelli & Danilo Leiva-León & Alberto Urtasun, 2023. "Housing prices in Spain: convergence or decoupling?," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 14(2), pages 165-187, June.
    2. Katarzyna Kopczewska & Mateusz Kopyt & Piotr Ćwiakowski, 2021. "Spatial Interactions in Business and Housing Location Models," Land, MDPI, vol. 10(12), pages 1-25, December.
    3. Sheng-Hau Lin & Jia-Hsun Li & Jing-Chzi Hsieh & Xianjin Huang & Jia-Tsong Chen, 2018. "Impact of Property Tax on Housing-Market Disequilibrium in Different Regions: Evidence from Taiwan for the period 1982–2016," Sustainability, MDPI, vol. 10(11), pages 1-18, November.
    4. Brzezicka, Justyna & Wisniewski, Radoslaw & Figurska, Marta, 2018. "Disequilibrium in the real estate market: Evidence from Poland," Land Use Policy, Elsevier, vol. 78(C), pages 515-531.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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