Wealth effects on the housing markets: Do market liquidity and market states matter? |
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| Institution: | 1. Department of International Business Studies, National Chi Nan University, Taiwan;2. Department of Finance, Chung Hua University, Taiwan;3. Department of Finance, National Sun Yat-sen University, Kaohsiung, Taiwan;1. School of Management, Kochi University of Technology, 185 Tosayamada, Kami-City, Kochi 782-8502, Japan;2. School of Economics, Chukyo University, 101-2 Yagoto-honmachi, Shouwa-ku, Nagoya, Aichi 466-8666, Japan;1. Department of Economics, Tshwane University of Technology, South Africa;2. Department of Economics, University of Pretoria, Pretoria 0002, South Africa |
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| Abstract: | This paper analyzes the effect of household wealth (including housing and financial wealth) on housing sales and probes their long-run and short-run dynamic relationships. We further examine the short-run effect of financial wealth on housing sales by employing quantile regressions, restricted upon different liquidity (quantile) levels and up-down housing markets, from which the differences between the early and late stages of an uptrend/downtrend can be respectively exhibited. We find that housing wealth, income, and mortgage rates have long-run influences on housing sales. Looking at the short run, we find that housing sales only respond to housing wealth and mortgage rates. When we distinguish the effects of financial wealth on housing sales in up-down housing markets, we note a positive influence of financial wealth on housing sales in down markets, but not in up markets. Particularly, our results show an impact of housing liquidity on the short-run relationships. |
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