Determinants of house price volatility in Namibia
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 18 March 2019
Issue publication date: 27 August 2019
Abstract
Purpose
This paper aims to test the volatility and analyses the macroeconomic determinants of house price volatility in Namibia over the period 2007 Quarter 1 to 2017 Quarter 2. It further explores the causal relations between house price volatility and its determinants.
Design/methodology/approach
The study used autoregressive conditional heteroskedastic and generalized autoregressive conditional heteroskedastic models to test for volatility. The vector error correction model was used to analyse the determinants and causal relations.
Findings
The results support the hypothesis that house prices in Namibia exhibits persistent volatility. It was further established that past period volatility’ GDP and mortgage loans are the key determinants of house price volatility. Additionally’ there exists unidirectional causality from GDP and mortgage loans to house price volatility.
Practical implications
Policy implications emanating from the study implies that macroeconomic fundamentals should be monitored closely to mitigate the issues of house price volatility.
Originality/value
The study is the first of its kind in Namibia to address the pertinent issues of ever increasing housing prices.
Keywords
Citation
Kaulihowa, T. and Kamati, K. (2020), "Determinants of house price volatility in Namibia", International Journal of Housing Markets and Analysis, Vol. 12 No. 4, pp. 807-823. https://doi.org/10.1108/IJHMA-10-2018-0077
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited