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Roman Šustek (Queen Mary University of London) - Global house prices since 1950
Research Seminar - Roman Šustek (Queen Mary University of London) - Global house prices since 1950
Co-author: Haroon Mumtaz (Queen Mary University of London)
Abstract
What drives house prices? Applying a parsimonious model to house prices in 12 countries since 1950, we show that expectations about future fundamentals were the key driver behind major house price movements. In the model, house prices depend on the expected future housing stock, population, income per capita, and age distribution. The growth rates of these fundamentals contain persistent components, estimated from data, affecting expectations. The model quantitatively accounts for the spectacular boom and bust in Japan, the boom starting in many countries in early 1990s, and the house price cycles in Switzerland. A decomposition into the contributing factors is carried out.
Online Research seminars organized by the Bank of Finland's Research Unit are open to all researchers interested in the subjects covered. Those wishing to attend a seminar are kindly asked to register in advance, by filling in the Online Registration Form. The registration for each seminar is open until 9:00 am the day of the seminar. You will receive a link to join the seminar by email at the latest one hour before the seminar is scheduled to begin.
Online Research seminars organized by the Bank of Finland's Research Unit are open to all researchers interested in the subjects covered. Those wishing to attend a seminar are kindly asked to register in advance, by filling in the Online Registration Form. The registration for each seminar is open until 9:00 am the day of the seminar. You will receive a link to join the seminar by email at the latest one hour before the seminar is scheduled to begin.