Credit, liquidity and housing prices

Abstract

The document analyses links between real estate prices, interest rates, the amount of credit granted, the international direct investment position and the net income derived from tourism during the period between 2003 and 2016 for the Spanish case. For statistical evaluation, an autoregressive vectors model with quarterly frequency and four lags is used. The results highlight the net foreign direct investment position as the main factor, followed by interest rates and the credit granted divided by per capita income. Another determining factor is the autoregressive behavior shown by prices. There is practically no influence from tourism. It is necessary to emphasize the presence of wide confidence intervals in the impulse response functions that could compromise some of the results obtained.