Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Foreign investment in Australian residential properties

Foreign investment in Australian residential properties The purpose of this study is to examine the impact that foreign investment in existing houses and new housing development has on residential house prices and the growth of the housing construction sector.Design/methodology/approachThe analysis is based on a panel cointegration method, estimated using annual data for all Australian states and territories spanning the period of 1990-2013.FindingsThe results indicate that increases in foreign investment in existing houses do not significantly lead to increases in house prices. On the other hand, a 10 per cent increase in foreign investment for housing development decreases house prices by 1.95 per cent. We also find that foreign real estate investments have a positive impact on housing construction activities in the long run.Originality/valueExisting studies used aggregate foreign real estate investment in their analyses. As foreign investment in existing houses and foreign investment for housing development have different impacts on the demand and supply sides of housing market, it is crucial that the analysis of the effects of foreign investment in residential properties on real estate market is conducted for each type differently. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Housing Markets and Analysis Emerald Publishing

Foreign investment in Australian residential properties

Download PDF
15 pages

Loading next page...
 
/lp/emerald-publishing/foreign-investment-in-australian-residential-properties-qlKMxPsbZV
Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1753-8270
DOI
10.1108/ijhma-05-2018-0030
Publisher site
See Article on Publisher Site

Abstract

The purpose of this study is to examine the impact that foreign investment in existing houses and new housing development has on residential house prices and the growth of the housing construction sector.Design/methodology/approachThe analysis is based on a panel cointegration method, estimated using annual data for all Australian states and territories spanning the period of 1990-2013.FindingsThe results indicate that increases in foreign investment in existing houses do not significantly lead to increases in house prices. On the other hand, a 10 per cent increase in foreign investment for housing development decreases house prices by 1.95 per cent. We also find that foreign real estate investments have a positive impact on housing construction activities in the long run.Originality/valueExisting studies used aggregate foreign real estate investment in their analyses. As foreign investment in existing houses and foreign investment for housing development have different impacts on the demand and supply sides of housing market, it is crucial that the analysis of the effects of foreign investment in residential properties on real estate market is conducted for each type differently.

Journal

International Journal of Housing Markets and Analysis – Emerald Publishing

Published: Mar 20, 2019

Keywords: Australia; Construction; Foreign investment; Panel cointegration; House prices; Construction costs; F41; F21; G12

References

  • The real story of housing prices in Australia from 1970 to 2003
    Abelson, P.; Chung, D.
  • Macroeconomic determinants of international housing market
    Adams, Z.; Füss, R.
  • Report on foreign investment in residential real estate
  • The determinants of house prices and construction: an empirical investigation of the Swiss housing economy
    Borowiecki, K.J.
  • Are foreign investors shutting first home buyers out of the market? ABC news
    Bowden, T.
  • Should foreign real estate investment be controlled in China?
    Chan, N.
  • Distribution of the estimators for autoregressive time series with a unit root
    Dickey, D.A.; Fuller, W.A.
  • Co-integration and error correction: representation, estimation, and testing
    Engle, R.F.; Granger, C.W.J.
  • Factors contributing to the fluctuation in residential construction in Iran
    Gholipour, H.F.
  • The effect of foreign real estate investments on house prices: evidence from emerging economies
    Gholipour, H.F.
  • Foreign investments in real estate, economic growth and property prices: evidence from OECD countries
    Gholipour, H.F.; Al-mulali, U.; Mohammed, A.H.
  • House prices, money, credit, and the macroeconomy
    Goodhart, C.; Hofmann, B.
  • Does ‘hot money’ drive China’s real estate and stock markets?
    Guo, F.; Huang, Y.S.
  • Chinese property investment to be examined as house economics committee reviews foreign investment laws
    Hyam, R.; Janda, M.
  • Testing for unit roots in heterogeneous panels
    Im, K.S.; Pesaran, M.H.; Shin, Y.
  • What do CAPITAL inflows do? Dissecting the transmission mechanism for Thailand, 1980-1996
    Jansen, W.J.
  • Spurious regression and residual-based tests for cointegration in panel data
    Kao, C.
  • Do capital inflows matter to asset prices? The case of Korea
    Kim, S.; Yang, D.Y.
  • The impact of capital inflows on asset prices in emerging Asian economics: is too much money changing too little good?
    Kim, S.; Yang, D.Y.
  • The wealth report 2014
  • Foreign liquidity to real estate market: ripple effect and housing price dynamics
    Liao, W.C.; Zhao, D.; Lim, L.P.; Wong, G.K.M.
  • Dynamic interaction between house prices and stock prices in Malaysia
    Lean, H.H.; Smyth, R.
  • Unit root tests in panel data: asymptotic and finite-sample properties
    Levin, A.; Lin, C.F.; Chu, C.S.J.
  • Social polarization and Australian cities
    Murphy, P.; Watson, S.
  • Fully modified OLS for heterogeneous cointegrated panels
    Pedroni, P.; Baltagi, B.H.
  • The politics of foreign investment in Australian housing: Chinese investors, translocal sales agents and local resistance
    Rogers, D.; Lee, C.L.; Yan, D.
  • Low interest rates and housing booms: the role of capital inflows, monetary policy and financial innovation
    Sá, F.; Towbin, P.; Wieladek, T.
  • The global liveability report 2017, a free overview
  • Capital inflows and asset prices: evidence from emerging Asia
    Tillmann, P.
  • The drivers of overseas investments in the Australian residential property market
    Wong, P.
  • The structure of housing finance markets and house prices in Asia
    Zhu, H.