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Housing Affordability Options for First Home Owner-Occupiers in Australia: A Simulation Analysis

  • Ross Guest

This paper presents a simulation analysis of several policies, or policy proposals, for improving housing affordability for first home owner-occupiers in Australia: the First Home Owner Grant, housing equity partnerships and deposit loans. The focus is on the impact of these measures for housing demand, the private saving rate and house prices. The simulations apply a housing tenure choice model in which a representative adult household makes a lifetime plan concerning when to buy and sell a house, and the amount of housing and non-housing consumption over its adult lifetime. An insight from the lifecycle framework is that policies to improve housing affordability can have two effects on housing demand and house prices: a life-cycle timing effect and a liquidity effect; and it is possible that these effects will work in opposite directions on housing demand and therefore house pric

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Paper provided by Econometric Society in its series Econometric Society 2004 Australasian Meetings with number 66.

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Date of creation: 11 Aug 2004
Date of revision:
Handle: RePEc:ecm:ausm04:66
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  1. N. Gregory Mankiw & David N. Weil, 1988. "The Baby Boom, The Baby Bust, and the Housing Market," NBER Working Papers 2794, National Bureau of Economic Research, Inc.
  2. Hayashi, Fumio & Ito, Takatoshi & Slemrod, Joel, 1988. "Housing finance imperfections, taxation, and private saving: A comparative simulation analysis of the United States and Japan," Journal of the Japanese and International Economies, Elsevier, vol. 2(3), pages 215-238, September.
  3. Ermisch, John F. & Jenkins, Stephen P., 1999. "Retirement and housing adjustment in later life: evidence from the British Household Panel Survey," Labour Economics, Elsevier, vol. 6(2), pages 311-333, June.
  4. VanderHart, Peter G., 1998. "The Housing Decisions of Older Households: A Dynamic Analysis," Journal of Housing Economics, Elsevier, vol. 7(1), pages 21-48, March.
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