New Housing Supply and Residential Construction Costs

A Panel ECM Approach

Henry Liu, Kerry London

Research output: A Conference proceeding or a Chapter in BookConference contribution

Abstract

The supply of new housing in Australia has been experiencing a low increase rate since the 1990s in conjunction with an increasingly strong housing demand. On the contrary, residential construction costs across Australia?s states maintained dramatic increases simultaneously. Economic theory suggests that new housing supply is correlated to the costs of residential constructions. However, few empirical studies have focused on examining this relationship for Australian housing markets. To comprehensively investigate the relationship between the supply of new housing and residential construction costs a function for new housing supply considering the effects of regional heterogeneities is introduced in this study. By estimating a panel error correction model (ECM) applicable for quantifying the correlation with regional heterogeneities, this research identifies that a causal link and a strong correlation exist in between new housing supply and residential construction costs in Australia.
Original languageEnglish
Title of host publicationPRRES 2011: Proceedings of the 17th Pacific Rim Real Estate Society Annual Conference
Place of PublicationAustralia
PublisherPacific Rim Real Estate Society
Pages1-21
Number of pages21
Publication statusPublished - Jan 2011
Externally publishedYes
Event17th Annual Pacific Rim Real Estate Society Conference (PRRES 2011) - Gold Coast, Gold Coast, Australia
Duration: 16 Jan 201119 Jan 2011
http://www.prres.net/index.htm?http://www.prres.net/Conference.htm

Publication series

NamePacific Rim Real Estate Society Conference
PublisherPacific Rim Real Estate Society
ISSN (Print)1444-8921

Conference

Conference17th Annual Pacific Rim Real Estate Society Conference (PRRES 2011)
Abbreviated titlePRRES 2011
CountryAustralia
CityGold Coast
Period16/01/1119/01/11
Internet address

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Liu, H., & London, K. (2011). New Housing Supply and Residential Construction Costs: A Panel ECM Approach. In PRRES 2011: Proceedings of the 17th Pacific Rim Real Estate Society Annual Conference (pp. 1-21). (Pacific Rim Real Estate Society Conference). Australia: Pacific Rim Real Estate Society.