Analysis of the effects of (de)regulation on housing prices in Spain 1977–2019

Abstract

Purpose This paper analyzes the regulatory effects on homeownership and rental prices in Spain in the years between 1977m1 and 2019m5, taking into account the economic crisis. It also studies the causal relationship of the prices of private housing (owned and rented).

Design/methodology/approach Interrupted time series analysis has been used to analyze the legislative impact on the construction sector. Also, the Box–Cox transformation has been used to carry out the above analysis. Finally, Granger's test has made possible to determine the causal relationship between the price series.

Findings The results obtained in this work show the partial positive effects of legislative instrumentalization, which in general result in decreasing trends of prices in both types of housing use. Likewise, the causal relationship between the prices of owned and rented housing shows that the latter do not provide any incentive with respect to the former.

Social implications The social implications in this work could be important since this paper analyzes the effects of (de)regulation on housing prices in Spain, and the policy implications could help to control the speculation in housing.

Originality/value The results obtained in this work could be relevant, both from the point of view of future housing policies and of the agents involved and that of society in general. In addition, this work could contribute to fill the existing gap in this field in Spain, given the scarce literature that raises the objective, using quantitative methodologies.