Regional house price convergence in Spain during the housing boom

Abstract

The aim of this paper is to identify convergence clubs in house prices among Spanish regions over the period 1995:Q1 to 2007:Q4 and to investigate which factors are responsible for club formation. Employing a novel regression-based convergence test proposed by Phillips and Sul (2007) we find that regional house prices do not converge to a common trend, which confirms the existence of some degree of segmentation in the Spanish housing market. The research results support the existence of convergence clubs, indicating that Spanish regions form four separate groups that converge to different house price levels. Results of an ordered logit model suggest that differences in population growth, size of the rental market, initial house supply and geographical situation have played a crucial role in determining club membership.

Club convergence in innovation activity across European regions

“…We captured regional R&D investment by means of R&D measured as the total regional intramural R&D expenditure in all sectors, private and public, as a percentage of GDP. We consider R&D in the initial period as the conditioning variable similarly to other studies (Blanco, Martin, & Vazquez, ; Wang, Zhang, Huang, & Cai, ).…”

Procesy konwergencji na europejskich rynkach mieszkaniowych. Ujęcie międzynarodowe i regionalne

“…Konwergencja cenowa była przedmiotem badań także na wielu innych rynkach, w tym na: rynku australijskim [Ma, Liu 2015], indyjskim [Aye, Goswami, Gupta 2013], hiszpańskim [Blanco, Martin, Vazquez 2015], francuskim [Holmes, Otero, Panagiotidis 2017], polskim [Gnat 2016;Dittmann 2014;Żelazowski 2019] czy południowoafrykańskim [Das, Gupta, Kaya 2010]. Szczegółowy przegląd literatury poświęconej problematyce konwergencji rynków mieszkaniowych prezentuje tabela 5.1.…”

The Effects of the 2012 Spanish Law Reform to Protect Mortgage Debtors

“…The evolution of house prices illustrates the recent Spanish housing boom. As Blanco et al (2016) explain, from the middle of the 1990s to 2007 the housing market was characterised by an extraordinary boom, which multiplied house prices by a factor of more than three. In particular, between 1995 and 2007 the average annual rate of increase of house prices was 9.7%, with a maximum of over 17%…”

“…renting. As Blanco et al (2016) point out, "in Spain, property ownership is widely viewed as superior to renting almost as a social status". As a result, the rental market is far less developed in Spain than in other European countries.…”