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Demographic Changes and Real Housing Prices in Canada


  • Mario Fortin
  • André Leclerc

    () (Département d'économique, Université de Sherbrooke)


This paper seeks to determine how demographic and non-demographic factors have contributed to past changes in Canada’s real housing prices as well as their possible impact over the next twenty years. To this goal, we estimate with annual data from 1956 to1997 a structural model of the Canadian housing market. This model possesses two important long-run properties, that is, the longrun supply curve is perfectly elastic while real housing price is cointegrated with real per-capita income. These two conditions imply that housing price shows a tendency to return to a stable longrun growth path dictated by the trend growth rate in real income. Although real income has been the dominant factor behind the fluctuations in the real asset price of housing since 1956, the growth rate of the population between 25 and 54 years of age has also played an important role. In the future, even if aging will continue to be a negative factor on housing demand, the continuation of past trends in real income is likely to be sufficient to counterbalance this negative impact. Consequently, real housing prices should continue to rise over the next twenty years, with possible exceptions in the Atlantic provinces and in Manitoba which will suffer a more substantial population decline.

Suggested Citation

  • Mario Fortin & André Leclerc, 2000. "Demographic Changes and Real Housing Prices in Canada," Cahiers de recherche 00-06, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
  • Handle: RePEc:shr:wpaper:00-06

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    References listed on IDEAS

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    4. Scherer, F M, 1982. "Inter-Industry Technology Flows and Productivity Growth," The Review of Economics and Statistics, MIT Press, vol. 64(4), pages 627-634, November.
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    6. M. V. Posner, 1961. "International Trade And Technical Change," Oxford Economic Papers, Oxford University Press, vol. 13(3), pages 323-341.
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    Cited by:

    1. Paul Makdissi & Cyril Téjédo, 2000. "Problèmes d’appariement et politique de l’emploi," Cahiers de recherche 00-04, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    2. John Baldwin & Petr Hanel & David Sabourin, 2000. "Les déterminants des activités d’innovation dans les entreprises de fabrication canadiennes : le rôle des droits de propriété intellectuelle," Cahiers de recherche Statistique Canada No 11F, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    3. Yuan Cheng & Xuehui Han, 2013. "Does large volatility help?—stochastic population forecasting technology in explaining real estate price process," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(1), pages 323-356, January.
    4. Pene Kalulumia & Denis Bolduc, 2004. "Generalized Mixed Estimation Of A Multinomial Discretecontinuous Choice Model For Electricity Demand," Cahiers de recherche 04-01, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    5. Pene Kalulumia, 2002. "Effects of government debt on interest rates: evidence from causality tests in johansen-type models," Cahiers de recherche 02-07, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    6. Thomas F. Crossley & Yuri Ostrovsky, 2003. "A Synthetic Cohort Analysis of Canadian Housing Careers," Social and Economic Dimensions of an Aging Population Research Papers 107, McMaster University.
    7. Yasmine Essafi & Arnaud Simon, 2015. "Housing market and demography, evidence from French panel data," ERES eres2015_165, European Real Estate Society (ERES).
    8. Marsha J. Courchane & Judith A. Giles, 2002. "A Comparison of U.S. and Canadian Residential Mortgage Markets," Econometrics Working Papers 0201, Department of Economics, University of Victoria.
    9. Petr Hanel, 2003. "Impact Of Government Support Programs On Innovation By Canadian Manufacturing Firms," Cahiers de recherche 04-02, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.

    More about this item


    Housing; Demography.;

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts


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