Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/205602
Authors: 
Coleman, Andrew
Scobie, Grant M.
Year of Publication: 
2009
Series/Report no.: 
New Zealand Treasury Working Paper No. 09/05
Publisher: 
New Zealand Government, The Treasury, Wellington
Abstract: 
The housing market is both large and complex. This paper develops a simple model that captures the essential features of the supply and demand for housing, and which is used to evaluate the impact of a range of policy interventions. Increases in the stock of housing would reduce rents and house prices. A reduction in tax concessions for landlords would raise rents and moderate house prices. Additional subsidies for owner-occupancy would tend to reduce rents and raise house prices. Significant reductions in rents and house prices would follow a fall in the cost of housing, through, for example lower regulatory and consent costs. Falling real interest rates result in lower rents, higher house prices and lower owner-occupancy rates. Despite the widespread attention owner-occupancy rates have attracted, the paper concludes that they are not a particularly helpful guide to the state of the housing market. Typically they are quite insensitive to policy interventions, a result that follows from the integrated view of both the rental and ownership market, adopted in this study.
Subjects: 
Housing markets
New Zealand
rental and owner-occupancy
elasticities
rents
house prices
policy simulations
JEL: 
R21
R31
R38
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Working Paper

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