Abstract
The supply of new housing in Australia has been experiencing a low increase rate since the 1990s in conjunction with an increasingly strong housing demand. On the contrary, residential construction costs across Australia's states maintained dramatic increases simultaneously. Economic theory suggests that new housing supply is correlated to the costs of residential constructions. However, few empirical studies have focused on examining this relationship for Australian housing markets. To comprehensively investigate the relationship between the supply of new housing and residential construction costs a function for new housing supply considering the effects of regional heterogeneities is introduced in this study. By estimating a panel error correction model (ECM) applicable for quantifying the correlation with regional heterogeneities, this research identifies that a causal link and a strong correlation exist in between new housing supply and residential construction costs in Australia.
Original language | English |
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Title of host publication | Proceedings from the PRRES Conference 2011: 17th Annual Pacific Rim Real Estate Society Conference, Gold Coast, Australia, January 16-19, 2011 |
Publisher | Pacific Rim Real Estate Society |
Number of pages | 21 |
Publication status | Published - 2011 |
Event | Pacific Rim Real Estate Society. Conference - Duration: 15 Jan 2012 → … |
Conference
Conference | Pacific Rim Real Estate Society. Conference |
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Period | 15/01/12 → … |