House prices and COVID-19 pandemic shocks in India: a nonlinear ARDL analysis
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 22 June 2022
Issue publication date: 21 March 2023
Abstract
Purpose
India is one of those countries that are severely affected by the COVID-19 pandemic. With the upsurge in the cases, the country recorded high unemployment rates, economic uncertainties and slugging growth rates. This adversely affected the real estate sector in India. As the relation of the housing market with the gross domestic product is quite lasting thus, the decline in housing prices has severely impacted the economic growth of the nation. Hence, the purpose of this paper is to gauge the asymmetric impact of COVID-19 shocks on housing prices in India.
Design/methodology/approach
Studies revealed the symmetric impact of macroeconomic variables, and contingencies on housing prices dominate the literature. However, the assumption of linearity fails to apprehend the asymmetric dynamics of the housing sector. Thus, the author uses a nonlinear autoregressive distributed lag model to address this limitation and test the existence of short- and long-run asymmetry.
Findings
The findings revealed the long- and short-run asymmetric impact of the COVID-19 outbreak and the peak of the COVID-19 on housing prices. The results indicate that the peak of COVID-19 had a greater impact on housing prices in comparison to the outbreak of COVID-19. This can be explained as prices will revert to normal at a speed of 0.978% with the decline in the number of COVID-19 cases. Whereas the housing prices rise at a rate of 0.714 as a result of government intervention to deal with the ill effects of the COVID-19 outbreak. Moreover, it can be inferred that both the outbreak and peak of COVID-19 will lead to a minimal decline in housing prices, while with the decline in the number of cases and reduction in the impact of the outbreak of COVID, the housing prices will rise at an increasing rate.
Originality/value
To the best of the authors’ knowledge, this is the first study to understand the impact of the outbreak and peak of COVID-19 on the housing prices separately.
Keywords
Acknowledgements
Author’s declaration contribution: Niharika Mehta – Identified the gap, collected data, performed analysis, reviewed literature, performed analyses and wrote the conclusion. Dr Seema Gupta – Designed tables and graphs, discussed variables, techniques and interpreted the results. Dr Shipra Maita – Contributed to conclusion and reviewed the paper.
Statement and declaration: Declarations of interest: none.
Funding: This research did not receive any specific grant from funding agencies in the public, commercial or not-for-profit sector.
Citation
Mehta, N., Gupta, S. and Maitra, S. (2023), "House prices and COVID-19 pandemic shocks in India: a nonlinear ARDL analysis", International Journal of Housing Markets and Analysis, Vol. 16 No. 3, pp. 513-534. https://doi.org/10.1108/IJHMA-02-2022-0026
Publisher
:Emerald Publishing Limited
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