Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/36660
Year of Publication: 
2010
Series/Report no.: 
Discussion Paper Series 1 No. 2010,12
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
We develop a formula for user costs of housing on the basis of a neoclassical approach to housing investment which does not impose a perfect capital market assumption. We suggest that the definition for the user costs of housing should be extended by an additional term which mirrors the credit constraints a household would be faced with. This extension term consists of the inflation gap between consumer and house price inflation multiplied with an average loan-to-value ratio and the real house prices. The empirical relevance of our finding is confirmed by a VECM. A time series for the user costs of housing is calculated using this extended definition.
Subjects: 
Housing investments
user costs of housing
cointegration
JEL: 
C32
E13
E22
ISBN: 
978-3-86558-625-4
Document Type: 
Working Paper

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