Housing and Economic Adjustment

Motu Working Paper No. 03-09

68 Pages Posted: 5 Dec 2003

See all articles by Arthur Grimes

Arthur Grimes

Motu Economic and Public Policy Research Trust

Suzi Kerr

Motu Economic and Public Policy Research Trust

Andrew Aitken

Motu Economic and Public Policy Research

Date Written: July 2003

Abstract

Housing is the most important component of wealth for many New Zealanders. Its location is fixed and its value is influenced by economic and other factors specific to that location. Hence when people live in owner-occupied homes their wealth is strongly associated with their local economic conditions. Housing is also a major factor in influencing migration decisions and, hence, regional mobility. To shed light on the behaviour of the New Zealand housing market, we examine the dynamic and long run responses of house values across spatial communities and across time to economic variables that impact on the local economy. We use a specially constructed QVNZ-sourced database for house prices and house sales, and a range of explanatory variables constructed consistently across TLA and Regional Council levels.

Keywords: economic adjustment, New Zealand, house prices

JEL Classification: R100, R210, R310

Suggested Citation

Grimes, Arthur and Kerr, Suzi and Aitken, Andrew, Housing and Economic Adjustment (July 2003). Motu Working Paper No. 03-09. Available at SSRN: https://ssrn.com/abstract=461420 or http://dx.doi.org/10.2139/ssrn.461420

Arthur Grimes (Contact Author)

Motu Economic and Public Policy Research Trust ( email )

19 Milne Terrace
Island Bay
Wellington 6002
New Zealand

Suzi Kerr

Motu Economic and Public Policy Research Trust ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand
+64 4 383 4250 (Phone)
+64 4 383 4270 (Fax)

Andrew Aitken

Motu Economic and Public Policy Research ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

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