Assessing Early Policy Impacts of the National Housing Accord Using ARIMAX Time Series Forecasting

Abstract

This paper aims to address the research gap on evaluating the National Housing Accord’s effects post-implementation. It applies ARIMAX time series forecasting to the Monthly Building Approvals from the Australian Bureau of Statistics prior to the commencement of the National Housing Accord. The forecasted values are then compared to the actual values to assess the short-term impacts of the Accord to date. It was found that the actual values had an increasing trend that deviated from the flat forecasted trend, indicating a positive effect of the National Housing Accord on building approvals. However, it remained within the 80% confidence interval of the forecasting model, not allowing a definite conclusion to be drawn. The main limitations of the paper discussed included the short time frame and the selection of exogenous variables for the model. It suggested that future research should carry out a similar methodology, but at a later stage of the Accord and after revisiting the selection of exogenous variables. Overall, this paper represents an initial step toward quantitatively evaluating the effects of the NHA on housing supply.