House prices and demographic change. Canadian evidence

Gary V. Engelhardt, James M. Poterba

Research output: Contribution to journalArticle

62 Scopus citations

Abstract

We examine the links between demography-induced changes in housing demand and real house prices using postwar data for Canada. Although Canadian demographic patterns are very similar to those in the United States, real house prices exhibit a substantially different trajectory: they rise in the early 1970s, and then fall nearly forty per cent between 1975 and the mid-1980s. We estimate simple time-series models relating house prices to demographic factors, and unlike previous estimates for the U.S. by Mankiw and Weil (1989), we find a statistically insignificant and in most cases negative association between demographic demand and house prices. These results suggest caution in extrapolating historical U.S. trends to the next century, while also illustrating that substantial real declines in house values are not impossible.

Original languageEnglish (US)
Pages (from-to)539-546
Number of pages8
JournalRegional Science and Urban Economics
Volume21
Issue number4
DOIs
StatePublished - Dec 1991
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies

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