IMF Working Papers

Fundamental Drivers of House Prices in Advanced Economies

By Nan Geng

July 13, 2018

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Format: Chicago

Nan Geng. Fundamental Drivers of House Prices in Advanced Economies, (USA: International Monetary Fund, 2018) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

House prices in many advanced economies have risen substantially in recent decades. But experience indicates that housing prices can diverge from their long-run equilibrium or sustainable levels, potentially followed by adjustments that impact macroeconomic and financial stability. Therefore there is a need to monitor house prices and assess whether they are sustainable. This paper focuses on fundamentals expected to drive long run trends in house prices, including institutional and structural factors. The scale of potential valuation gaps is gauged on the basis of a cross-country panel analysis of house prices in 20 OECD countries.

Subject: Asset prices, Disposable income, Financial institutions, Housing, Housing prices, Mortgages, National accounts, Prices

Keywords: Asset price movement, Asset prices, Disposable income, Elasticities of housing supply, Global, House price, House price trend, House prices, Housing, Housing investment, Housing markets, Housing price, Housing prices, Housing stock, Interaction terms, Long-run house price development, Long-run house price trend, Mortgages, OECD countries, Price, Price correction, Understanding housing price development, Valuation gap, Valuation gaps, WP

Publication Details

  • Pages:

    24

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/164

  • Stock No:

    WPIEA2018164

  • ISBN:

    9781484367629

  • ISSN:

    1018-5941