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The Role of Credit in the Housing Market. ESRI WP495. December 2014

Gerlach-Kristen, Petra and McInerney, Niall (2014) The Role of Credit in the Housing Market. ESRI WP495. December 2014. [Working Paper]

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    We estimate a structural model of the Irish housing and mortgage markets and isolate the role of demand and supply factors in each market. We focus on the pre-2004 period during which house prices and mortgage credit exhibited a stable relationship. We find that mortgage demand is determined by interest rates, income and house price growth while mortgage supply is mainly a function of deposits. We show that the demand for housing is predominantly driven by house prices, mortgage credit and demographics and that supply depends on the profitability of housing construction. We then use the model to forecast how these markets will develop based on different scenarios about the model’s exogenous variables. The high-growth scenario sees house prices rising by 50 percent over the next decade with an annual increase in the housing stock of 18,500 units.

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    Item Type: Working Paper
    Subjects for non-EU documents: Countries > Ireland
    EU policies and themes > Policies & related activities > economic and financial affairs > general
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Economic and Social Research Institute (ESRI), Dublin > ESRI Working Papers
    Depositing User: Alyssa McDonald
    Official EU Document: No
    Language: English
    Date Deposited: 19 Nov 2019 14:14
    Number of Pages: 26
    Last Modified: 29 Dec 2019 13:09

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