Journal
INTERNATIONAL JOURNAL OF HOUSING MARKETS AND ANALYSIS
Volume -, Issue -, Pages -Publisher
EMERALD GROUP PUBLISHING LTD
DOI: 10.1108/IJHMA-07-2023-0094
Keywords
Housing price index; Spain stock indices; Fully modified least square; Dynamic least square; Macroeconomic indicators; Housing
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This study investigates the relationship between macroeconomic indicators and the housing prices index (HPI) in Spain using cointegrating regression, fully modified ordinary least squares, and dynamic ordinary least squares methodologies. The findings suggest that economic growth, inflation, stock indices, foreign trade, and interest rate have significant short-term effects on HPI, while inflation, stock indices, interest rate, and monetary rate have significant long-term effects. Exchange rate, unemployment, and money supply have little impact on HPI in Spain.
Purpose This study aims to determine how changes in macroeconomic indicators and the housing prices index (HPI) are related. These factors can cause short-term and long-term changes in the housing market in Spain.Design/methodology/approach The study used cointegrating regression, fully modified ordinary least squares and dynamic ordinary least squares methodologies. The models are trained using quarterly time series data for these parameters from 2010 to 2022. A comprehensive examination is conducted to explore the relationship between macroeconomic issues and fluctuations in the HPI.Findings The results indicate statistically significant short-run effects (p < 0.05) of economic growth, inflation, Spanish stock indices, foreign trade and the interest rate on HPI. The inflation variables, Spain's stock indices, interest rate and monetary rate, have statistically significant long-run effects (p < 0.05) on HPI. The exchange rate, unemployment and money supply have no substantial impact on HPI in Spain.Originality/value The study's findings significantly contribute to increased information concerning the level of investing activity in the Spanish housing sector. After conducting an in-depth study of both the long-run and short-run connections with HPI, the study proved to be highly effective in formulating appropriate policies.
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