UCLA

Buying a home for marriage is customary in many societies. Traditionally, therefore, young couples getting married is a key driver of demand for homeownership. Yet the idea of marriage-induced demand for homeownership is a relatively underexplored component of housing price change. We examine the role of marriage-induced demand for homeownership in Hong Kong, a relatively self-contained housing market with fewer options for migration than most large cities. We use an instrumental variable strategy to test the hypothesis that more unmarried individuals at the prime age for marriage increases housing prices. We find that an additional one thousand marriage-aged but unmarried individuals leads to a seven per cent increase in housing prices. These findings confirm the importance of demographic factors such as cohort size and marriage rates on housing price projections, housing needs assessments, and housing policy.