Residential Housing Investment In Spain

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Stephan Kienle


Housing, Credit Constraint, VECM


Over the last decade, the Spanish housing market has gained a lot of attention due to its dynamics in house prices and residential investments. Our contribution provides a general framework based on the classical user cost approach. We take an equity constraint explicitly into account when modeling a long-term equilibrium. Against the background of theoretical implications we estimate a vector error correction model and find some evidence for the existence of such a financial constraint.


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