Does Aging Affect Real House Prices?The Evidence from Eight Emerging Asian Economies
| Autor: | Cheng-Lun Shih, 施正倫 |
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| Rok vydání: | 2013 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 101 There are increasing studies examining the relationship between population aging trend and real estate prices. The theoretical background is “Life Cycle Hypothesis” proposed by Modigliani and Brumberg (1954), and Ando and Modigliani (1963). The hypothesis argues that “Aging Phenomenon” will cause the retired generations to sell more assets than the assets purchased by working generations. This thus will result in asset market having excess supply and inevitably dampening assets prices. Since most Asian economies are facing aging issues, yet on the other hand, their economies are also growing, this paper will shed light on whether aging will affect real asset prices in Asia. Unlike previous studies which focused on developed economies, this paper investigates the impact of aging on real house prices in eight Asian economies during 1988-2011. I apply Takats (2010) to find out the link between growth rate of old age dependency ratio and the return of real house prices in China, Hong Kong, Indonesia, Malaysia, South Korea, Singapore, Taiwan and Thailand. This paper examines that population aging will negatively affect real house prices, and total population will positively affect real house prices, after controlling several macroeconomic factors, including GDP per capita, unemployment rate, real interest rate, foreign direct investment and land supply index. The result is quite robust owing to several measures of aging and different estimation methods. I also find that there will be positive house price premiums for wealthier economies with higher degree of economic freedom and better institutional environment. This will help mitigate the downside influence on real house prices. Moreover, this paper uses data from UN Population Prospectus to project the potential decline in house prices in next 25 years. Among eight sample countries, the house price is expected to fall on average about 1.34 percent annually. Specifically, the estimated partial aging effect on house prices is the severest in China, about -4.14 percent per annum; the house price in Hong Kong, on the other hand, is unaffected by population aging. Given the rapid surge of economic growth in emerging Asia, we prove empirically that aging does negatively affect real house prices. This negative relationship would not only help investors to take account of the potential country-specific demographic risk, but also warn policy makers to reconsider their population policy. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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