TY - JOUR
T1 - Urbanisation and housing finance nexus : evidence from Australia
AU - Bangura, M.
AU - Lee, Chyi Lin
PY - 2023/9
Y1 - 2023/9
N2 - The rapid urbanisation being experienced in major cities across the globe has occasioned greater housing demand and brought to the fore the importance of understanding housing finance systems to support the housing market. However, current literature on the nexus between urbanisation and housing finance is limited. Further, existing literature about housing finance is aggregated and assumed symmetric effects. We used a NARDL model to examine the asymmetric effects of housing variables on loan commitment over 1980Q2 to 2022Q2 and documented the following findings. First, we decoupled the housing finance market into owner-occupier and housing investment and found asymmetric effects of key housing variables on loan commitment for each of these submarkets. Second, urbanisation has a telling effect on loan commitment for owner-occupier but not for investors. Third, the asymmetric results highlighted the importance of promoting economic prosperity and reducing the housing lending rate to boost loan commitment for both owner-occupier and housing investment by varying magnitudes. However, increasing the approval rate of private dwellings and boosting the household savings ratio can enhance loan commitment for owner-occupiers but not investors. These findings could aid the formulation of more targeted housing finance policies, in turn, helping develop a more resilient housing market especially in countries with high urbanisation rates.
AB - The rapid urbanisation being experienced in major cities across the globe has occasioned greater housing demand and brought to the fore the importance of understanding housing finance systems to support the housing market. However, current literature on the nexus between urbanisation and housing finance is limited. Further, existing literature about housing finance is aggregated and assumed symmetric effects. We used a NARDL model to examine the asymmetric effects of housing variables on loan commitment over 1980Q2 to 2022Q2 and documented the following findings. First, we decoupled the housing finance market into owner-occupier and housing investment and found asymmetric effects of key housing variables on loan commitment for each of these submarkets. Second, urbanisation has a telling effect on loan commitment for owner-occupier but not for investors. Third, the asymmetric results highlighted the importance of promoting economic prosperity and reducing the housing lending rate to boost loan commitment for both owner-occupier and housing investment by varying magnitudes. However, increasing the approval rate of private dwellings and boosting the household savings ratio can enhance loan commitment for owner-occupiers but not investors. These findings could aid the formulation of more targeted housing finance policies, in turn, helping develop a more resilient housing market especially in countries with high urbanisation rates.
UR - https://hdl.handle.net/1959.7/uws:78233
U2 - 10.1016/j.habitatint.2023.102897
DO - 10.1016/j.habitatint.2023.102897
M3 - Article
SN - 0197-3975
VL - 139
JO - Habitat International
JF - Habitat International
M1 - 102897
ER -