Examining Critical Factors Affecting the Housing Price in New Zealand: A Causal Loop Diagram Model

Date
2023-12-26
Authors
Albsoul, Hadeel
Doan, Dat Tien
Aigwi, Itohan Esther
Naismith, Nicola
Ghaffarianhoseini, Amirhosein
Ghaffarianhoseini, Ali
Supervisor
Item type
Journal Article
Degree name
Journal Title
Journal ISSN
Volume Title
Publisher
Springer Science and Business Media LLC
Abstract

The New Zealand housing market has become a public concern due to the significant surge in housing prices. The steep increase in housing prices has presented significant difficulties for individuals seeking homeownership, particularly for first-home buyers. Therefore, this research aims to identify the crucial factors of the New Zealand housing price system and their influence on housing prices. The system dynamics (SD) methodology was applied to organise the cause and effect variables into a causal loop diagram (CLD) illustrating the structure and interaction of the primary feedback mechanisms within the complex system of housing prices. Accordingly, population growth, macroeconomic stability, investment demand, monetary policy, and construction costs are key contributing factors to promoting affordable housing prices and increasing homeownership rates in New Zealand. The construction costs, including the land cost, are the most significant of all the factors. Hence, there is a call to prioritise optimising construction resources. This research’s developed model was validated by exploring experts’ views on the model’s components and system dynamics. The findings provide relevant stakeholders in New Zealand’s residential construction sector with solutions and guidelines for coping with supply and demand fluctuations and reducing economic cycles on material price and workforce development.

Description
Keywords
1205 Urban and Regional Planning , Urban & Regional Planning , 3301 Architecture , 3304 Urban and regional planning , 4406 Human geography
Source
Journal of Housing and the Built Environment, ISSN: 1566-4910 (Print); 1573-7772 (Online), Springer Science and Business Media LLC. doi: 10.1007/s10901-023-10095-1
Rights statement
This version of the article has been accepted for publication, after peer review (when applicable) and is subject to Springer Nature’s AM terms of use, but is not the Version of Record and does not reflect post-acceptance improvements, or any corrections. The Version of Record is available online at: https://dx.doi.org/10.1007/s10901-023-10095-1