Fundamental Drivers of House Prices in Advanced Economies

Geng, Nan

doi:10.5089/9781484367629.001

Cited by 40 publications

(35 citation statements)

References 6 publications

(8 reference statements)

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“…minima and maxima), suggesting that the duration of the identified expansion and contraction phases are similar (see also the next paragraph on this issue), except from 1999:Q4 to 2001:Q4. The overvaluation in the latter period is, nevertheless, in line with the findings of the International Monetary Fund (Geng, ). In line with the former qualitative finding, the HPMI and the two housing price cycles both started in 2011–2012 a period of gradual recovery from the trough in 2009:Q3 that still endures.…”

Section: Validation and Robustness Checkssupporting

confidence: 86%

A Novel Housing Price Misalignment Indicator for Germany

Hertrich

2019

German Economic Review

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From 2014 until present, housing prices in Germany have been rising faster than consumer prices in all quarters except one, raising concerns about an excessive overheating of the housing market. To assess the vulnerability of the German housing market to a future realignment of prices or even a housing bust, this paper develops a housing price misalignment indicator that is composed of seven indicators, which are commonly associated with the fundamental value of residential property. An empirical application to the most recent data suggests that the German housing market exhibits an overvaluation of approximately 11%, where interest rate risk and a relatively advanced stage of the housing cycle are identified as the main factors fueling these imbalances, while a rather solid debt‐servicing capacity mitigates these imbalances since end‐2009.

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Section: Validation and Robustness Checkssupporting

confidence: 86%

A Novel Housing Price Misalignment Indicator for Germany

Hertrich

2019

German Economic Review

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“…They are also more efficient than transaction taxes on property since they neither distort labour mobility nor are as sensitive to housing market volatility (O'Reilly, 2018). However, the economic importance of property taxes (even with a broad base) may be reduced in contexts with low tax rates and either outdated or below-market cadastral values (Geng, 2018;OECD, 2011). There is an important need to link the tax base to the market value of property.…”

Section: Box 1 Impacts Of Property Taxes On Housing Developmentmentioning

confidence: 99%

“…There is an important need to link the tax base to the market value of property. In many countries around the world, assessed property values lag behind actual market values since valuation can date back to several years (even decades in extreme cases) and updates may occur irregularly or through indexation (Geng, 2018;Blöchliger, 2015;LILP/MCFE, 2019).…”

Section: Box 1 Impacts Of Property Taxes On Housing Developmentmentioning

confidence: 99%

Housing policies for sustainable and inclusive cities

Moreno-Monroy¹,

Gars²,

Matsumoto³

et al. 2020

OECD Regional Development Working Papers

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PUBE 2  HOUSING POLICIES FOR SUSTAINABLE AND INCLUSIVE CITIES © OECD 2020 ABOUT THE OECDThe OECD is a multi-disciplinary inter-governmental organisation of 36 member countries which engages in its work an increasing number of non-members from all regions of the world. The Organisation's core mission today is to help governments work together towards a stronger, cleaner, fairer global economy. Through its network of 250 specialised committees and working groups, the OECD provides a setting where governments compare policy experiences, seek answers to common problems, identify good practice, and co-ordinate domestic and international policies. More information available: www.oecd.org. ABOUT OECD REGIONAL DEVELOPMENT WORKING PAPERSWorking papers from the Regional Development Policy Division of the OECD cover a full range of topics including regional statistics and analysis, urban governance and economics, rural governance and economics, and multi-level governance. Depending on the programme of work, the papers can cover specific topics such as regional innovation and networks, the determinants of regional growth or fiscal consolidation at the subnational level. OECD Regional Development Working Papers are published on http://www.oecd.org/cfe/regional-policy.

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“…As prices have risen by 17% since 2015, the question of the sustainability of house prices has emerged. According to the literature, the fundamental determinants of house prices are income, the interest rate and the number of dwellings, see among others Geng (2018) and Mikhed & Zemčík (2009). In 2018 the Spanish government has announced a series of measures to avoid pressures in the price of housing.…”

Section: Introductionmentioning

confidence: 99%

The Spanish housing market: is it fundamentally broken?

Cuestas

Kukk

2019

Applied Economics Letters

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This paper aims to investigate the relationship between housing prices and their fundamental determinants using the example of Spain and considering the possibility of structural breaks in the relationship. We find that the cointegrating coefficient estimates are quite unstable and need to be estimated for different subperiods. Specifically we find that the standard fundamentals explain the behaviour of equilibrium house prices well during the boom-bust period. However, only corporate profit or capital income seems to explain the evolution in recent years. AbstractThis paper aims to investigate the relationship between housing prices and their fundamental determinants using the example of Spain and considering the possibility of structural breaks in the relationship. We find that the cointegrating coefficient estimates are quite unstable and need to be estimated for different subperiods. Specifically we find that the standard fundamentals explain the behaviour of equilibrium house prices well during the boom-bust period. However, only corporate profit or capital income seems to explain the evolution in recent years.

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Fundamental Drivers of House Prices in Advanced Economies

Cited by 40 publications

References 6 publications

A Novel Housing Price Misalignment Indicator for Germany

A Novel Housing Price Misalignment Indicator for Germany

Housing policies for sustainable and inclusive cities

The Spanish housing market: is it fundamentally broken?

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