House prices and long-term equilibrium in the regulated market of the Netherlands
Qi Tu (TU Delft - OLD Housing Systems)
Jan de Haan (Statistics Netherlands (CBS), TU Delft - OLD Housing Systems)
P.J. Boelhouwer (TU Delft - OLD Housing Systems)
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Abstract
This paper establishes a simple affordability model that implicitly incorporates the major Dutch market features to elucidate long-run house prices under a regulatory environment. The results reveal a long-run relationship for house prices under strict regulations. The association among house prices, income, interest rates, and inflation is verified using an aggregated dataset. In the long-run, incomes and interest rates function as the two prime forces driving price dynamics, whereas the role of inflation is limited.
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