Template-Type: ReDIF-Paper 1.0
Author-Name: Arthur Grimes
Author-X-Name-First: Arthur	
Author-X-Name-Last: Grimes
Author-Email: arthur.grimes@motu.org.nz
Author-Workplace-Name: Motu Economic and Public Policy Research and the University of Auckland
Author-Name: Sean Hyland
Author-X-Name-First: Sean	
Author-X-Name-Last: Hyland
Author-Email: sean.hyland@motu.org.nz
Author-Workplace-Name: Motu Economic and Public Policy Research
Title: Housing Market Dynamics and the GFC: The Complex Dynamics of a Credit Shock
Abstract:  We analyse the multiple channels of influence that GFC-induced credit restrictions had on New Zealand’s subnational housing markets. Our model isolates dynamics caused by impacts on the supply and the demand sides of the market. These dynamics are compared to those caused by a migration shock, a more common form of housing shock in New Zealand. We focus on the impacts on two outcome variables: house prices and housing supply; both shocks cause substantial cyclical adjustments in each variable. Similar cyclical dynamics could complicate the conduct of macro-prudential policies which are designed to affect bank credit allocation.
Length: 39 pages
Creation-Date:  2013-10
File-URL: https://motu-www.motu.org.nz/wpapers/13_12.pdf
Number: 13_12
Classification-JEL: E51, R21, R31
Keywords: House prices, housing supply, credit restrictions, GFC, migration
Handle: RePEc:mtu:wpaper:13_12