What Does The Uk Macroeconomic Environment Affect The Regional House Prices?

Better Essays

To What Extent Does the UK Macroeconomic Environment Affect the Regional House Prices in the UK?
Real estate markets are closely related to macroeconomics, as was demonstrated by the global financial crisis of the late 2000s. The crisis originated in the real estate market when mortgage interest rates were low. The demand for real estate increased and banks offered risky subprime mortgages (Lopus, 2013). The financial crisis led to a debate across scholars on the macroeconomic factors that affected the development of the price bubble in real estate markets. On the one hand, irrational investors may determine the changes in real estate markets as suggested by Brunnermeier and Julliard (2008) and Case and Shiller (2003). On the other hand, Goodman and Thibodeau (2008) argued that fundamental macroeconomic factors determine the developments in real estate markets to the greatest extent. This research addresses this debate and explores the effects of macroeconomic environment on the real estate prices in the UK. The focus of the study is made on the determinants of regional real estate prices in the country. Aims and Objectives
The aim of the paper is to explore to what extent the UK macroeconomic environment affects regional real estate prices. The following objectives of the dissertation are formulated: To measure the effects of economic growth, unemployment, housing stock and interest rates on the UK regional real estate prices; To compare regional

Get Access