IMF Working Papers

House Price Synchronicity, Banking Integration, and Global Financial Conditions

By Adrian Alter, Jane Dokko, Dulani Seneviratne

November 28, 2018

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Adrian Alter, Jane Dokko, and Dulani Seneviratne. House Price Synchronicity, Banking Integration, and Global Financial Conditions, (USA: International Monetary Fund, 2018) accessed November 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

We examine the relationship between house price synchronicity and global financial conditions across 40 countries and about 70 cities over the past three decades. The role played by cross-border banking flows in residential property markets is examined as well. Looser global financial conditions are associated with greater house price synchronicity, even after controlling for bilateral financial integration. Moreover, we find that synchronicity across major cities may differ from that of their respective countries’, perhaps due to the influence of global investors on local house price dynamics. Policy choices such as macroprudential tools and exchange rate flexibility appear to be relevant for mitigating the sensitivity of domestic housing markets to the rest of the world.

Subject: Asset and liability management, Business cycles, Economic growth, Exchange rate arrangements, Financial crises, Foreign exchange, Global financial crisis of 2008-2009, Housing prices, International liquidity, Prices

Keywords: Banking intergration, Business cycles, Cycle synchronicity, Equity price return, Exchange rate arrangements, Financial conditions, Gap synchronicity, Gaps of country, Global, Global financial crisis of 2008-2009, Global liquidity, House price growth, House price synchronicity, House price synchronicity measure, Housing market, Housing prices, International liquidity, Price gap synchronicity, Synchronicity measure, WP

Publication Details

  • Pages:

    42

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/250

  • Stock No:

    WPIEA2018250

  • ISBN:

    9781484385692

  • ISSN:

    1018-5941

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