Aging and Real Estate Prices: Evidence from Japanese and US Regional Data
In this paper, we empirically investigate how real estate prices are affected by aging. We run regional panel regressions for Japan and the United States. Our regression results show that, both in Japan and the U.S., real estate prices in a region are inversely correlated with the old age dependency ratio, i.e. the ratio of population aged 65+ to population aged 20-64, in that region, and positively correlated with the total number of population in that region. The demographic factor had a greater impact on real estate prices in Japan than in the U.S. Based on the regression result for Japan and the population forecast made by a government agency, we estimate the demographic impact on Japanese real estate prices over the next 30 years. We find that it will be -2.4 percent per year in 2012-2040 while it was -3.7 percent per year in 1976-2010, suggesting that aging will continue to have downward pressure on land prices over the next 30 years, although the demographic impact will be slightly smaller than it was in 1976-2010 as the old age dependency ratio will not increase as much as it did before.
|Date of creation:||Dec 2013|
|Contact details of provider:|| Postal: Hongo 7-3-1, Bunkyo-ku, Tokyo 113-0033|
Web page: http://www.carf.e.u-tokyo.ac.jp/english/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert F. Martin, 2005.
"The baby boom: predictability in house prices and interest rates,"
International Finance Discussion Papers
847, Board of Governors of the Federal Reserve System (U.S.).
- Robert F. Martin, 2006. "The Baby Boom: Predictability in House Prices and Interest Rates," 2006 Meeting Papers 84, Society for Economic Dynamics.
- Ohtake, Fumio & Shintani, Mototsugu, 1996.
"The effect of demographics on the Japanese housing market,"
Regional Science and Urban Economics,
Elsevier, vol. 26(2), pages 189-201, April.
- Ohtake, F. & Shintani, M., 1995. "The Effects of Demographics on the Japanese Housing Market," ISER Discussion Paper 0391, Institute of Social and Economic Research, Osaka University.
- Engle, Robert & Granger, Clive, 2015.
"Co-integration and error correction: Representation, estimation, and testing,"
Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-276, March.
- Patric H. Hendershott, 1991.
"Are Real House Prices Likely to Decline by 47 Percent?,"
NBER Working Papers
3880, National Bureau of Economic Research, Inc.
- Hendershott, Patric H., 1991. "Are real house prices likely to decline by 47 percent?," Regional Science and Urban Economics, Elsevier, vol. 21(4), pages 553-563, December.
- Kiyohiko Nishimura & Elod Takáts, 2012. "Ageing, property prices and money demand," BIS Working Papers 385, Bank for International Settlements.
- Takáts, Előd, 2012. "Aging and house prices," Journal of Housing Economics, Elsevier, vol. 21(2), pages 131-141.
When requesting a correction, please mention this item's handle: RePEc:cfi:fseres:cf334. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.