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

Learn More →

Housing affordability: an econometric framing for policy discussions

Housing affordability: an econometric framing for policy discussions The purpose of this study is to analyze short- and long-run market-sensitive drivers of housing affordability. The study highlights an ongoing housing affordability crisis in an emerging market context by also providing an empirical tool to combat the crisis.Design/methodology/approachTo investigate determinants of uniquely constructed effective housing affordability index and house price to income ratio index, the author uses a bound testing approach to cointegration and error correction models, besides causality tests, variance decompositions and impulse response functions. This study uses Turkish data for the period of 2007 M06 and 2017 M12.FindingsThe evidence suggests that the housing affordability crisis is mainly driven by credit expansion, rent and construction costs. A sensible housing policy response would target these variables. This evidence suggests that housing affordability mostly depends on housing market dynamics rather than policies because of the exogeneous/cyclical natures of the drivers.Research limitations/implicationsData constraints shape the study. A regional or an aggregate-level panel study cannot be developed because of a lack of data. This limitation inevitably results in the exclusion of relevant socio-economic/political factors and is also the main reason for the lack of comparative analysis in a cross-country setting.Practical implicationsThis study argues that dependency on neoliberal housing market practices seems the underlying reason for the lack of efficient policy answers and the ongoing affordability crisis. From a policymaking perspective, the study suggests that necessary policy measures to resolve the housing affordability crisis may give a specific emphasis on housing rent, housing credit volume and construction costs as the major components of the crisis.Originality/valueThis study develops a novel measure and presents a new conceptual framework by combining quantitative research methods and policymaking in housing affordability. In this respect, to the best of the author’s knowledge, this is the first work to comparatively investigate the determinants of uniquely developed monthly housing affordability measurements. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Housing Markets and Analysis Emerald Publishing

Housing affordability: an econometric framing for policy discussions

Loading next page...
 
/lp/emerald-publishing/housing-affordability-an-econometric-framing-for-policy-discussions-QP7GzukMI0

References (116)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1753-8270
eISSN
1753-8270
DOI
10.1108/ijhma-01-2022-0015
Publisher site
See Article on Publisher Site

Abstract

The purpose of this study is to analyze short- and long-run market-sensitive drivers of housing affordability. The study highlights an ongoing housing affordability crisis in an emerging market context by also providing an empirical tool to combat the crisis.Design/methodology/approachTo investigate determinants of uniquely constructed effective housing affordability index and house price to income ratio index, the author uses a bound testing approach to cointegration and error correction models, besides causality tests, variance decompositions and impulse response functions. This study uses Turkish data for the period of 2007 M06 and 2017 M12.FindingsThe evidence suggests that the housing affordability crisis is mainly driven by credit expansion, rent and construction costs. A sensible housing policy response would target these variables. This evidence suggests that housing affordability mostly depends on housing market dynamics rather than policies because of the exogeneous/cyclical natures of the drivers.Research limitations/implicationsData constraints shape the study. A regional or an aggregate-level panel study cannot be developed because of a lack of data. This limitation inevitably results in the exclusion of relevant socio-economic/political factors and is also the main reason for the lack of comparative analysis in a cross-country setting.Practical implicationsThis study argues that dependency on neoliberal housing market practices seems the underlying reason for the lack of efficient policy answers and the ongoing affordability crisis. From a policymaking perspective, the study suggests that necessary policy measures to resolve the housing affordability crisis may give a specific emphasis on housing rent, housing credit volume and construction costs as the major components of the crisis.Originality/valueThis study develops a novel measure and presents a new conceptual framework by combining quantitative research methods and policymaking in housing affordability. In this respect, to the best of the author’s knowledge, this is the first work to comparatively investigate the determinants of uniquely developed monthly housing affordability measurements.

Journal

International Journal of Housing Markets and AnalysisEmerald Publishing

Published: Feb 28, 2023

Keywords: Turkey; ARDL; Determinants of homeownership affordability; Homeownership affordability; Housing affordability index; House price to income ratio; R38; O18; R31

There are no references for this article.