The sensitivities of Jordan housing demand to macroeconomic factors: demand supply analysis model application

Abstract

This paper summarizes the arguments and counterarguments within the scientific discussion on the issue mismatch between demand and supply of Jordan housing market. The main purpose of the research is systematization of the literary sources and approaches for solving the problem demand behaviour of Jordan housing market and its influencing factors with emphasis on macroeconomic variables on demand formula for the period between 2006 to 2019 indicates that the relevance of this scientific problem decision is that investigation The sensitivities of Jordan housing demand to macroeconomic factors. In the paper is carried out in the following logical sequence methodological tools of the research methods were. This research offers empirical estimates using the time series data from the current demand model for residential homes in Jordan. The study applied the (Janet and Lam 2012) model of general function of housing demand (Qd = f (G, H, D, t). Years of research data used from 2006 to 2019 of Jordan housing market statistic. The paper presents the results of an empirical analysis of Janet and Lam 2012 model which showed that the research empirically confirms and theoretically proves that demographic factors were statistically significant in most formulations, it had the wrong sign on its coefficient, indicated low impact on the amount of new construction activity completed for residential purpose. More important the study found that housing sectors related factors is the most significant variables in explaining the demand for new housing in Jordan and their present are relatively drive the new housing demand function, and housing suppliers may react to the demands of housing customers, issuing new building permit or complete licensed one when the price increase, in case of Jordan we found exactly the opposite; price increase and number of new building completed and new permit are declining and housing price increases. The results of the research can be useful for both decision and policy makers are engaged in housing sectors in developing policy and offer more affordable unit size.