Housing demand sensitivity to mortgage change in Jordan

الملخص EN

The problem of the affordability of housing in developing countries is related to high population increase relative to economic growth.

In Jordan, home ownership is made difficult even more by the rapid increase in housing cost during the past few years.

Effective policy measures demands careful understanding of the determinants and behavior of the markets concerned, especially the housing market.

Since very little is known about the making of the Jordanian market, this study contributes by developing a demand model investigates the determinants of the Jordanian new housing market and identifies the effectiveness of the variables concerned in order to assist the making of more effective policies towards the fulfillment of housing needs in the country.

The specification of the proposed demand model is based on empirical evidence, conceptual framework and on the nature of the study market.

Estimation employed linear and log forms fed by time series aggregate data.

The results indicate a surprising outcome.

Most of the conventional demographic and macro economic variables couldn’t explain significantly the demand function.

The most influential and significant variables turned to be those related to the mortgage lending sector.

The implications are very serious to capture the focus of the state’s housing policy to the fact that considerable actions could be taken through an effective monetary policy towards maximizing production, especially for implementing its new program that aims to providing assistance to build more decent homes.