Determinants of housing prices in Spanish’ urban areas

Paper presented to the 40th Congress of the European Regional Science Association, Barcelona, August 30-September 2, 2000.Residential price level in Spain varies broadly among markets. Real state theory explains that prices depend on market characteristics such as vacancy level, land availability, construction offer elasticity to respond to high or low speed to changes on the demand, as well as economic growth potentiality, industrial and services activities located inside urban areas, etc. Price analysis in main Spanish main cities show that tensions appear to exist in some of them where economic activity is not as dynamic as others (Taltavull, 1999). These tensions are reflected in price levels in places where main economic activities are not the most efficient ones. This paper tries to find evidence of the existent relationship between residential prices and economic factors that are demand determinants such wages, migrations and productive structure, among others. It uses panel data and GLS methodology to capture relationship between prices and other economic and demographic factors and demographic nature. The results show how some relationships appears to exist between price levels and families’ waged income as well as with population into 71 different main cities in Spain

New supply and housing price behaviour: A short revision of the empirical evidence

House-building has been very intense in some European countries throughout the last 15 years but not in others. It has generated an expansion in the residential stock that has been explained as the result of some demand forces playing at the same time and boosting residential market mechanisms during this period. Although demand pressures have been similar across Europe, the new supply construction has reacted with distinct strength depending on the economies. This paper reviews the literature seeking for reasons to analyze the different reactions and the implication on house prices growth of development sector. It mainly classifies the literature between both the group that suggests stable supply elasticities in the short-long term and those sustaining that elasticities change dramatically, reflecting the developers reaction to market innovations. The differences in new housing supply responses across European countries remain a wide area for housing researchers to explain how housing prices react by region

International capital movement towards the Spanish real estate sector

Purpose – The purpose of this paper is to examine the determinants that affect international capital flows (ICF) toward the Spanish real estate market over the period 1995 first quarter to 2017 fourth quarter. Design/methodology/approach – VECM methodology is used to analyze time series and panel methods using pooled EGLS regression. Findings – VECM parameter results for construction and real estate activities sectors, quickly suggesting a stable performance of capital flows toward Spanish real estate sector that the short-term fluctuation of foreign investment results contributes to the long-term equilibrium relatively soon. By applying the Monetary theory of Johnson, the model identifies a relevant role of M3 explaining capital flows to real estate, together with the lagged variables of construction and real estate activities capital flows, Spanish real interest rate and Spain’s economic growth rate; they are the significant determinants on capital movement to Spanish real estate sector. Interestingly, Spanish housing prices as an exogenous variable, directly, significantly and negatively affect real estate capital flows in all cases as a way to capture the assets price bubble. Practical implications – Findings highlight reasons affecting capital flows to real estate and construction activities to Spanish sectors which allow capital Funds to take into account those drivers in their investment decisions. Originality/value – This paper is the first attempt to analyze the determinants of ICF to Spanish real estate market; it has a significant meaning for both Spanish economy and international investors

Fuel Poverty: Evidence from housing perspective

The literature has traditionally approached fuel poverty as a result of poverty. Fuel poor are those households who cannot pay fuel bill and have to live in cold ambient, with grave effects on their health. As fuel poverty is actually considered in poverty’s analysis, there is little discussion about whether homeowners (who own housing wealth and, theoretically, cannot be poor) could suffer this problem. This paper assesses fuel poverty amongst Spanish households. It deeps on how poverty situations triggers fuel poverty in the context of housing and discusses whether or not housing tenure causes fuel poverty due to housing characteristics, those usually evaluated as poverty component. The paper finds empirical evidence about the relevance of tenancy when it comes to explain the likelihood of falling under the poverty line as well as about the fact that fuel poverty has become a systematic situation in all poor Spanish households regardless of their tenant status. Using micro-data obtained from the Quality of Life Survey (EU-SILC) for Spain, the data are segmented by residential tenure and household type, calculating poverty lines for homeowners, renters (both at market prices and below them), and free-rent housing ‒the four tenure formulas existing in the Spanish housing market‒ and including two variables to capture fuel poverty situations. A logistic regression model is applied and results suggest that fuel poverty clearly appears as an expression of poverty at any tenancy type

Editorial. Global financial crisis resonance on real estate markets

The global financial crisis (GFC) has had major effects on real estate markets. The channels through which financial distress has spread its effects are being more fully appreciated as the data become more readily available and researchers through economic intuition link the evidence base with already known fundamental mechanisms. The outcomes are creating greater awareness of characteristics that affect real estate markets and their reactions post the crisis period, as well as potential changes in mechanisms that can affect investment decisions

International retiree migration and housing markets. Evidence from Spain

Purpose – Large numbers of Northern European retirees have migrated to Southern European countries. A relevant part of this migration is not driven by work purposes but rather the desire to establish residence in a warmer country. These migrants come from different countries and exhibit diverse socioeconomic characteristics and preferences, including varying income levels, housing tastes and cultural habits, which could potentially influence the housing market in their host countries. This paper aims to examine the permanent impact of retiree migrant flows on house prices in Alicante, Spain, from 1988 to 2019, explicitly considering the impact related to the country of origin. Design/methodology/approach – This paper examines the permanent impact of retiree migrant flows on house prices in Alicante, Spain, from 1988 to 2019, explicitly considering the impact related to the country of origin using panel cointegration – Dynamic Ordinary Least Squared (DOLS) models. Findings – Results indicate that the long-term relationship captures the entire effect on house price change and that prices react immediately to the immigrants' presence with permanent effects. The results also suggest that the strong retiree migration flow created a shock in the housing market with different effects on house prices related to the immigrants' country of origin. The model identifies that when income growth in the origin country is slower than in Spain it has a major impact on house prices. When purchasing capacity is larger in Alicante than in the origin country it exerts a stronger effect on housing prices. Retiree migration flow has permanent effect on housing market prices. Practical implications – Results indicate several ways to act on social and housing policies in specific cities in Alicante province, as well as in the origin countries, to alleviate potential disadvantages faced by expatriate retirees. Originality/value – This paper finds evidence of the specific impact of international retiree migrants on the hosting housing market. This study is the first paper that can estimate the specific effect on housing prices from a flow of retiree migrants by country of origin