Open AccessInternational Real Estate Review
Author(s) -
Svein Olav Krakstad
Publication year - 2015
Publication title -
journal of the asian real estate society
Language(s) - English
Resource type - Journals
ISSN - 1029-6131
DOI - 10.53383/100208
Subject(s) - economic rent , cointegration , real estate , economics , order (exchange) , work (physics) , wage , cost approach , price index , land price , econometrics , microeconomics , real estate investment trust , labour economics , agricultural economics , finance , mechanical engineering , engineering
This study analyzes the housing market by using four key ratios: price-rent, price-building cost, price-land cost and price-wage. We attempt to determine how they work together in order to explain the housing market. A unique dataset from Norway is used to investigate the long-run movements of the variables. In order to analyze these, we have created Norwegian hedonic indices for building and land costs. The cointegration tests confirm that there are long-term relationships between these ratios. The results show that these ratios affect future movement in house prices, rents, and building and land costs. Wages are weakly exogenous in the system and therefore drive house prices, rents, and building and land costs in the long run.