A New Zealand Regional Housing Model
The New Zealand Regional Housing Model (NZRHM) includes estimated equations for four key housing market variables: house prices, housing supply (new dwelling consents), residential vacant land (lot) prices, and average rents. Long run (cointegration) relationships and short run (error correction) relationships are estimated for each of these variables across 72 TLAs within New Zealand. The model is designed so that it can be used for short to medium term forecasting. It is also useful for simulating the effects of shocks to the housing market. The paper presents simulations of the impacts of shocks to exogenous variables (population, credit restrictions, construction costs and farm prices) as well as shocks to policy variables (developer contributions, accommodation supplement, and land availability). We also simulate the consequences of the Christchurch earthquakes for Canterbury housing outcomes. The over-arching conclusion across all simulations is that housing markets are very slow to adjust to disequilibria, such that exogenous shocks have very long lasting effects on prices and the housing stock.
|Date of creation:||Feb 2013|
|Date of revision:|
|Contact details of provider:|| Postal: Level 1, 97 Cuba Street, P.O. Box 24390, Wellington|
Web page: http://www.motu.org.nz
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- Arthur Grimes & Andrew Aitken, 2007. "House Prices and Rents: Socio-Economic Impacts and Prospects," Working Papers 07_01, Motu Economic and Public Policy Research.
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"A Simple Model of Housing Rental and Ownership with Policy Simulations,"
09_08, Motu Economic and Public Policy Research.
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NIESR Discussion Papers
98, National Institute of Economic and Social Research.
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- Arthur Grimes & Yun Liang, 2007. "Spatial Determinants of Land Prices in Auckland:Does the Metropolitan Urban Limit Have an Effect?," Working Papers 07_09, Motu Economic and Public Policy Research.
- Oded Palmon & Baron A. Smith, 1998. "New Evidence on Property Tax Capitalization," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 1099-1128, October.
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