R3 - Real Estate Markets, Production Analysis, and Firm Location

• How Do Interest Rates Spur the Housing Market: Exploring Nonlinear Effects

  Staff analytical paper 2026-35 Benjamin Straus, Stéphane Surprenant, Kerem Tuzcuoglu

  In this note we examine how monetary policy affects housing demand, supply and prices in Canada, and whether these effects vary with labour market conditions

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): C, C3, C32, E, E5, E52, R, R3, R31 Research Theme(s): Monetary policy, Monetary policy framework and transmission

• Immigration and US Shelter Prices: The Role of Geographical and Immigrant Heterogeneity

  Staff working paper 2024-40 James Cabral, Walter Steingress

  The arrival of immigrants increases demand for housing and puts upward pressure on shelter prices. Using instrumental variables based on the ancestry composition of residents in US counties, we estimate the causal impact of immigration on local shelter prices.

  Content Type(s): Staff research, Staff working papers JEL Code(s): J, J6, J61, R, R2, R23, R3, R31 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting, Structural challenges, Demographics and labour supply

• Predicting Changes in Canadian Housing Markets with Machine Learning

  Staff discussion paper 2023-21 Johan Brannlund, Helen Lao, Maureen MacIsaac, Jing Yang

  We apply two machine learning algorithms to forecast monthly growth of house prices and existing homes sales in Canada. Although the algorithms can sometimes outperform a linear model, the improvement in forecast accuracy is not always statistically significant.

  Content Type(s): Staff research, Staff discussion papers JEL Code(s): A, C, C4, C45, C5, C53, D, D2, R, R2, R3 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting

• Unpacking Moving: A Quantitative Spatial Equilibrium Model with Wealth

  Staff working paper 2023-34 Elisa Giannone, Qi Li, Nuno Paixão, Xinle Pang

  We propose a model to understand low observed migration rates by considering the interaction between location and wealth decisions. We look at different policies and find that temporary moving vouchers only slightly increase welfare, while lower housing regulations can decrease the welfare gap by lowering house prices nationwide.

  Content Type(s): Staff research, Staff working papers JEL Code(s): G, G5, G51, R, R1, R12, R13, R2, R3, R31, R5, R52 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply

• House Price Responses to Monetary Policy Surprises: Evidence from the U.S. Listings Data

  Staff working paper 2022-39 Denis Gorea, Oleksiy Kryvtsov, Marianna Kudlyak

  Existing literature documents that house prices respond to monetary policy surprises with a significant delay, taking years to reach their peak response. We present new evidence of a much faster response.

  Content Type(s): Staff research, Staff working papers JEL Code(s): E, E5, E52, R, R2, R21, R3, R31 Research Theme(s): Financial system, Household and business credit, Monetary policy, Monetary policy framework and transmission

• Analyzing the house price boom in the suburbs of Canada’s major cities during the pandemic

  Staff analytical note 2022-7 Louis Morel

  We assess how location affects house prices in Canada. The gap in prices between suburbs and downtown was closing gradually before the pandemic. The gap has been closing faster since spring 2020. This finding reflects a shift in preferences toward more living space.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): R, R2, R21, R23, R3, R32 Research Theme(s): Financial system, Household and business credit, Monetary policy, Real economy and forecasting

• Housing demand in Canada: A novel approach to classifying mortgaged homebuyers

  Staff analytical note 2022-1 Mikael Khan, Yang Xu

  We introduce a novel approach to categorize mortgaged homebuyers into first-time homebuyers, repeat homebuyers and investors. We show how these groups contribute to activity in Canadian housing markets, and we analyze the differences in their demographic and financial characteristics.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): R, R2, R21, R3, R31 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit

• Canadian housing supply elasticities

  Staff analytical note 2021-21 Nuno Paixão

  We explain how housing supply elasticities for Canadian cities are estimated. The procedure we use exploits the systematic differences in various cities’ sensitivity to regional house-price cycles.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): R, R1, R14, R3, R31, R5, R52 Research Theme(s): Financial system, Household and business credit, Monetary policy, Real economy and forecasting

• Detecting exuberance in house prices across Canadian cities

  Staff analytical note 2021-9 Ugochi Emenogu, Cars Hommes, Mikael Khan

  We introduce a model to detect periods of extrapolative house price expectations across Canadian cities. The House Price Exuberance Indicator can be updated on a quarterly basis to support the Bank of Canada’s broader assessment of housing market imbalances.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): C, C5, C53, R, R2, R21, R3, R31 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit, Models and tools, Economic models, Monetary policy, Real economy and forecasting

• Examining the Impact of Home Purchase Restrictions on China’s Housing Market

  Staff working paper 2021-18 Zhentong Lu, Sisi Zhang, Jian Hong

  How do “cooling measures” in the housing market—policies aimed to stabilize prices—affect the market? We use a structural model of housing demand and price competition among developers to evaluate China’s home purchase restriction policies implemented in 2010–11.

  Content Type(s): Staff research, Staff working papers JEL Code(s): O, O1, O18, R, R3, R31, R38 Research Theme(s): Financial markets and funds management, Market structure, Financial system, Household and business credit, Monetary policy, Real economy and forecasting