The role of house price indices in managing the integration of finance and housing markets in the European Union

Abstract

Purpose – The article aims to examine why residential property price indices (RPPI) are important, particularly in the European Union (EU) with its highly integrated financial system and examines the problems in developing a pan-European price index that aggregates the indices of different countries. Design/methodology/approach – The reasons why RPPI are important is explored through a review of the literature on residential price bubbles and the issues with the indices through studies of individual examples. Findings – Financial integration in the EU has taken place without adequate consideration having been given to diversity in residential property markets. The development of means of monitoring them has lagged behind integration with the national price indices using a variety of methods and approaches to data that limit the extent to which they can be aggregated. Originality/value – The article shows the need for better quality data about house price trends in Europe if the consequences of future bubbles are to be avoided. Current initiatives are unlikely to satisfy this, as they leave too many choices about methodology and data in the hands of individual countries.

Sentiment Measurement and its Relationship with Housing Prices: Review of Contemporary Dimensions

“…However, the use of the stock market proxies developed by (Baker & Wurgler, 2007) to predict movements in asset prices is the chief among all other approaches used. Nontheless, twitter sentiment (Hannum, Arslanli, &Kalay, 2019 andGrover &Grover, 2014) are once a while use by some researchers but incomparable to the earlier one's mentioned. Please, refer to Note 1 for details on the summary of literature.…”

“…However, considering the percentage of check-in tweets few positive relationships were recorded. Grover and Grover, (2014) also highlighted that house price variations may be attributed to twitter sentiments which are of much interest to investors and policymakers while Smailović, Grčar, Lavrač, & Žnidaršič, (2014) investigated whether twitter sentiment have any bearing on asset price movement. Regardless of the strong relationship between google trend sentiment constructed index and house prices, it is not always accurate in-terms of market timing (Dietzel, 2016).…”

Spatial analysis of Twitter sentiment and district-level housing prices

“…Similar texts can be found, particularly in the analysis of news media (Ruscheinsky et al , 2018), with sentiments clearly defined in reference to local or general property markets. While studies have analyzed the link between real-time sentiment from Twitter regarding a firm or index on asset prices (Ranco et al , 2015), to our knowledge no such study has looked at the link between such Twitter sentiments and local variation in property price variation by district, which may be of great interest to investors and policymakers (Grover and Grover, 2014). The sentiment expressed about locations or about something seen, heard or felt in a location may be an indirect gauge for property market sentiment in that location.…”

A Re-Assessment of House Price Indices: Evidence From the Spanish Market

“…This stems from the perception that house prices have macro-economic effects and that continuous monitoring in support of the identification of economic imbalances (European Economy [EU], 2012) facilitates transparency in the market. Given this context, a number of studies have focussed on the macro effects of house price deviation from their long term trend, the role of monetary channels of transmission influences, and the effect of the 'housing channel' on consumption prices (Mishkin, 2007; Bank for International Settlements [BIS], 2008;Taltavull & White, 2016;R. Grover & C. Grover, 2014), demonstrating the relevance of housing price indices.…”