scholarly journals Too much mortgage debt? The effect of housing financialization on housing supply and residential capital formation

2020 ◽  
Author(s):  
Sebastian Kohl
Keyword(s):  
House Price ◽  
Capital Formation ◽  
Housing Construction ◽  
Housing Supply ◽  
Mortgage Markets ◽  
Mortgage Debt ◽  
Construction Activity ◽  
New Construction ◽  
Cyclical Behavior ◽  
Residential Capital

Abstract This article argues that the explosion of mortgage finance has not led to a proportional expansion of housing supply across 17 countries in a historical perspective (1913–2016). Based on a collection of housing construction data, it shows that the co-cyclical behavior of construction, prices and mortgage credit has been followed by a decoupling of house-price mortgage spirals from the underlying stagnating or declining construction activity since the 1980s. Mortgage debt is nonlinearly associated with new construction: positive up to a threshold, negative thereafter. The article argues that the increasing use of housing as an asset, or housing financialization, can explain why mortgages grow without construction, i.e. through privatization of state housing and supply restrictions as a result of rentier strategies of housing-market insiders and private developers. Private mortgage markets have thus been a less reliable policy alternative to traditional state-led housing construction policies. The article confirms for housing what has previously been found for growth or capital formation: beyond a certain threshold, there is a curse of too much finance.

The Ichthys LNG Project: big, bold and beautiful

2013 ◽  
Vol 53 (2) ◽  
pp. 430
Author(s):  
Antoine Serceau
Keyword(s):  
Joint Venture ◽  
Oil And Gas ◽  
Capital Expenditure ◽  
Investment Decision ◽  
Weather Conditions ◽  
Subsea Pipeline ◽  
Central Processing ◽  
Pipeline Project ◽  
Construction Activity ◽  
New Construction

The Ichthys LNG Project is one of the most complex oil and gas developments attempted. It is three mega-projects in one: an onshore project, an offshore project, and a pipeline project. The onshore project is being developed in Darwin and involves two processing trains rated to produce a total of 8.4 million tonnes of LNG per year. Offshore, the central processing facility (CPF) will feature the world's largest semi-submersible platform. A substantial floating, production storage and offtake (FPSO) vessel, designed to hold more than one million barrels of condensate, will be stationed nearby. Both the CPF and FPSO will be permanently moored in an area notorious for cyclonic weather conditions and will be designed to withstand even the most extreme weather conditions for more than four decades. An 889 km subsea pipeline will link the Ichthys Field, 200 km off the Western Australian coast, to the onshore facilities in Darwin. This represents the longest subsea pipeline in the southern hemisphere and fifth longest in the world. A final investment decision for the project was announced in January 2012. This triggered intense construction activity and created hundreds of new construction jobs in Darwin and more globally. More than 4,000 direct jobs will be created at the peak of construction. An approved capital expenditure of $US34 billion by INPEX and the Ichthys Project joint venture participants shows a tremendous commitment to Australia. Since the discovery of the gas-condensate field in 2000, the Ichthys road has been one of identifying and overcoming geographical, political, technical, physical, financial, and commercial challenges. The Ichthys Project is a global effort, drawing on worldwide expertise to overcome these challenges and work towards first gas in late 2016.

scholarly journals International Real Estate Review

2014 ◽  
Vol 17 (2) ◽  
pp. 241-274
Author(s):  
Frank Packer ◽  
◽  
Timothy Riddiough ◽  
Jimmy Shek ◽  
◽  
...  
Keyword(s):  
Significant Variation ◽  
General Pattern ◽  
Market Development ◽  
Institutional Characteristics ◽  
Economic Data ◽  
Commercial Property ◽  
The Past ◽  
Construction Activity ◽  
New Construction ◽  
Different Sources

Securitized equity interests in commercial property (the so-called listed REIT market) across a number of countries are analyzed. In so doing, we have pulled together financial as well as real economic data from a large number of different sources. On the real side, we focus particularly on office property construction, as data are fairly available in that sector. The comparison of REIT markets across countries reveals significant variation in terms of institutional characteristics, but many similarities in terms of financial performance. Office construction activity also displays some synchronicity across countries, with a general pattern of reduced levels and volatility in construction activity over the past two decades. Linkages between REIT market development and the dynamics of new construction activity are explored.

scholarly journals NONLINEAR RELATIONSHIP BETWEEN HOUSING SUPPLY AND HOUSE PRICE IN MALAYSIA

2020 ◽  
Vol 24 (5) ◽  
pp. 313-322
Author(s):  
Geok Peng Yeap ◽  
Hooi Hooi Lean
Keyword(s):  
Price Index ◽  
House Prices ◽  
House Price ◽  
Threshold Level ◽  
Supply Curve ◽  
Nonlinear Relationship ◽  
Housing Supply ◽  
Pooled Mean Group ◽  
Housing Starts ◽  
Different Types

The novelty of this paper is to ascertain a nonlinear relationship between housing supply and house price. This study is conducted based on panel dataset of four different types of houses in Malaysia from 2002Q3 through 2016Q4. Although housing supply has been theoretically assumed to be positively and linearly related to house price, we observed that the number of new houses build in Malaysia has declined despite the increasing house prices. Hence, we posit that housing supply and house price are nonlinearly related. The results from pooled mean group estimation show the existence of inverted U-shaped housing supply curve. The threshold level of house price index is found at 186.92 where the effect of house price on housing starts will become negative after this point. We also find that the marginal effects of house price evaluated at the minimum and maximum levels are positive and negative, respectively, and statistically significant. This paper suggests that the squared term of house price should be included in estimating housing supply in Malaysia. The evidence of inverted U-shaped housing supply curve in Malaysia shows that housing authorities have taken steps to overcome the challenges of oversupply by reducing the approvals for housing development projects.

scholarly journals Analysing the Relationship between New Housing Supply and Residential Construction Costs with Regional Heterogeneities

2011 ◽  
Vol 11 (3) ◽  
pp. 58-67 ◽  
Author(s):  
Junxiao Liu ◽  
Kerry London
Keyword(s):  
Causal Link ◽  
Housing Construction ◽  
Residential Construction ◽  
Supply Side ◽  
Housing Sector ◽  
Housing Supply ◽  
Construction Costs ◽  
Policy Makers ◽  
Correction Model ◽  
The Relationship

New housing supply in Australia has been experiencing a low increasing rate in conjunction with a dramatic increase in residential construction costs since the 1990s. This study aims to estimate the relationship between new housing supply and residential construction costs with the regional heterogeneities. Based on a panel error correction model, it can be identified that there is a causal link and a significant correlation between new housing supply and construction costs in the Australian sub-national housing construction markets. The model developed in this research assists policy makers to better understand the nature of the supply side of the housing sector and then enact appropriate policies to improve the new housing supply in Australia.

Housing Supply Dynamics under Rent Control: What Can Evictions Tell Us?

2019 ◽  
Vol 109 ◽  
pp. 393-396
Author(s):  
Brian J. Asquith
Keyword(s):  
San Francisco ◽  
Rent Control ◽  
Housing Supply ◽  
New Construction

Measuring how rent-controlled landlords change their housing supply in response to rent increases is difficult, because new construction is automatically exempt. This paper explores evictions as a barometer for landlords' willingness to return their units to market when prices increase using San Francisco data. I find no evidence that controlled landlords turnover existing tenants to return their units to market, and some evidence they instead withdraw individual units. I also look at other ways of exiting controls, and find that small landlords are 54 percent more likely to first apply to condo-convert when condo prices rise 5.4 percent.

1740 and the Rules of the Game

2019 ◽  
pp. 10-47
Author(s):  
Philip T. Hoffman ◽  
Gilles Postel-Vinay ◽  
Jean-Laurent Rosenthal
Keyword(s):  
Developing Economies ◽  
Credit Markets ◽  
Consumer Credit ◽  
Mortgage Markets ◽  
Mortgage Debt ◽  
Rules Of The Game

This chapter looks at the size of the market in 1740 and explores who was involved in it. The stock of notarial debt, even though it excluded nearly all commercial and consumer credit, amounted to sixteen percent of GDP in 1740. Although that may at first glance seem paltry, especially when compared to the level of mortgage debt accumulated in some economies on the eve of the 2008 crisis, it is more than what mortgage markets achieve in many developing economies today. This mountain of private, nongovernmental debt raises some serious questions. The chapter addresses this issue by asking how to reconstruct past lending in a society, particularly for credit markets that have long been shrouded from view.

Sign in / Sign up

Export Citation Format

Share Document