Foreign capital inflows and housing market in Pakistan
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 19 January 2021
Issue publication date: 12 November 2021
Abstract
Purpose
Housing prices have been increasing tremendously in Pakistan, there should be many reasons but the haphazard urbanization and rapidly growing population. To find out the causes of this price rise, this study aims to assess the impact of the foreign capital inflow and some domestic factors on housing prices.
Design/methodology/approach
To get the benefits of high-frequency data, it has been converted into a monthly, quarterly and yearly basis. The unit root is performed to see the stationarity, Johansen test is used for cointegration and coefficients are obtained through the ordinary least squares technique. The robustness of the results is checked with dynamic ordinary least squares and the Chow breakpoint test is used to detect structural breaks.
Findings
The housing prices have increased over time; this has been reflected in all the data sets under observation. The country has observed a rapid growth in population and urbanization that has badly affected almost every activity of city life. The impact of foreign capital inflow is positive on the house price appreciation. There is a dire need to divert such foreign funds in the housing sector so that it cannot create an artificial price hike. The government should regularly publish a housing policy for the guidance of investors and the public at large. Also, public authorities should provide housing finance facility.
Originality/value
This is a novel work to the best of the authors’ knowledge because no one has studied the impact of foreign capital inflow on the housing market for the economy of Pakistan. Furthermore, this study is different in the sense that it has disaggregated annual data into a monthly and quarterly basis to get the benefits of high-frequency data.
Keywords
Acknowledgements
Declaration of Interest Statement: there is not any conflict of interest.
Disclosure Statement: no financial grant is taken.
Citation
Ahmed, R., Jawaid, S.T. and Khalil, S. (2021), "Foreign capital inflows and housing market in Pakistan", International Journal of Housing Markets and Analysis, Vol. 14 No. 5, pp. 936-952. https://doi.org/10.1108/IJHMA-07-2020-0089
Publisher
:Emerald Publishing Limited
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