Modeling Housing Demand for New Residential Buildings in Urban Areas

This study investigates the factors affecting the demand for new residential buildings in urban areas of iran during 1976-2010. the demand function for new residential buildings in urban areas was estimated and then the existence of a long-run relationship among variables of this function was studied using the bounds testing of the autoregressive distributed lag co-integration procedure. the test confirmed a long-run relationship among the variables, so the coefficients of the short-term and long-term demand for new residential buildings were estimated. the results show that the average income of urban households has the biggest impact on the long-term demand of new residential buildings and its sign is positive. in the short-term, the biggest impact on the demand for new residential buildings is the average cost of constructing a residential building, with a negative impact on the demand.