The differential effects of exchange rate fluctuations on local housing price growth: evidence from Australia

Jun Sung Kim, Liang Choon Wang

Research output: Contribution to journalArticleResearchpeer-review

2 Citations (Scopus)

Abstract

We investigate whether real exchange rate fluctuations contribute to the fluctuations in housing prices differently across local housing markets through the differential compositions of immigrants. We first develop a new measure of the immigrant-weighted local real exchange rate, which varies across areas and over time within Australia. Using this measure and a fixed-effect instrumental variables approach, we find that the growth in local real exchange rate positively affects housing price growth. This positive relationship is mainly driven by urban metropolitan areas.

Original languageEnglish
Number of pages16
JournalRegional Studies
DOIs
Publication statusAccepted/In press - 2023

Keywords

  • exchange rate
  • housing prices
  • immigration

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