IDEAS home Printed from https://ideas.repec.org/p/hit/rcesrs/dp26-2.html

Too Many Houses, Too Few People : Demographic Optimism, Housing Oversupply, and Falling House Prices across Advanced Economies

Author

Listed:
  • DENG, Yongheng
  • INOUE, Tomoo
  • NISHIMURA, Kiyohiko
  • SHIMIZU, Chihiro

Abstract

In population bonus periods, optimism about future housing demand fuels rapid construction and self-reinforcing price appreciation. In population onus periods, pessimism-amplified by the systematic failure of governments to revise demographic projections downward in a timely manner-drives structural oversupply, rising vacancy rates, and prolonged price stagnation. We formalise this mechanism through a present-value model in which the demographic regime asymmetrically shifts expected rent growth and the discount rate, and test it using annual panel data for 16 advanced economies over 1975- 2019. Pooled mean-group estimation shows that a rising old-age share significantly depresses long-run real house prices; the unanticipated ageing component (-8.826) substantially exceeds the government-projected component (-5.005). A rising youth share raises prices. Demographic structure further conditions monetary policy transmission: interest-rate cuts stimulate housing markets far more strongly in young than in ageing economies.

Suggested Citation

  • DENG, Yongheng & INOUE, Tomoo & NISHIMURA, Kiyohiko & SHIMIZU, Chihiro, 2026. "Too Many Houses, Too Few People : Demographic Optimism, Housing Oversupply, and Falling House Prices across Advanced Economies," RCESR Discussion Paper Series DP26-2, Research Center for Economic and Social Risks, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:rcesrs:dp26-2
    as

    Download full text from publisher

    File URL: https://hit-u.repo.nii.ac.jp/record/2061798/files/dp26-2_rcesr.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hit:rcesrs:dp26-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Digital Resources Section, Hitotsubashi University Library (email available below). General contact details of provider: https://edirc.repec.org/data/eshitjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.