ECONOMIC DETERMINANTS OF HOUSING INVESTMENT IN IRAN

An autoregressive distributed lag (ARDL), approach to cointegration analysis is used to study the short- and long-run determinants of housing investment in Iran over the period of 1375:3-1385:4. The explanatory variables include house price index, construction cost, household income, money supply, bank’s deposit interest rate, exchange rate, stock price index and gold coin price. The short and long run results indicate that house price index, household income, exchange rate and money supply have positive and construction cost and stock price index have negative effects on housing investment. However, the housing investment is not affected by gold coin price and bank’s deposit interest rate. This research also indicates that the eslasticities of housing investment with respect to house price index, construction cost, money supply and household income are greater than one. However, it was found to be inelastic with respect to other variables.