Determining the optimal rate of housing facilities and investigating its role on the link between facilities and the housing price index in Iran

The main purpose of this paper is to estimate and analyze the role of housing facility interest rates on the relationship between housing facilities and the housing price index in Iran. To do so, we verify the variables affecting housing prices and then by using the threshold regression technique presented by Hansen (1996, 2000), the threshold interest rate for housing facilities has been determined. The results indicate that there is a non-linear and significant relationship between housing facilities and housing prices. Moreover, the threshold interest rate of housing facilities is estimated at 14.79%. That means, when the interest rate of the facility exceeds the estimated threshold rate, due to the increase in the cost of obtaining the facility, the demand for it has decreased.