Canadian City Housing Prices and Urban Market Segmentation

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The authors provide a detailed empirical analysis of Canadian city housing prices. They examine the long-run relationship between city house prices in Canada from 1981 to 2005 as well as idiosyncratic relations between city prices and city-specific variables. The results suggest that city house prices are only weakly correlated in the long run, and that there is a disconnect between house prices and interest rates. City-specific variables such as union wage levels, new-housing prices, and the issuance of building permits tend to be positively related to city existing-house prices. Surprisingly, there is mixed evidence with respect to standard measures of economic activity, such as labour force and per capita GDP.

Published In:

Canadian Journal of Economics (0008-4085)
August 2009. Vol. 42, Iss. 3; pp. 1132-49

JEL Code(s): C, C2, C22, C3, C32, R, R2