House Price Developments in Europe: A Comparison

66 Pages Posted: 12 Sep 2008

See all articles by Alexander W. Hoffmaister

Alexander W. Hoffmaister

International Monetary Fund (IMF) - Research Department

Angana Banerji

International Monetary Fund (IMF)

Haiyan Shi

International Monetary Fund (IMF)

Paul Hilbers

International Monetary Fund (IMF)

Date Written: September 2008

Abstract

House prices in Europe have shown diverging trends, and this paper seeks to explain these differences by analyzing three groups of countries: the "fast lane", the average performers, and the slow movers. Price movements in the first two groups are found to be driven mostly by income and trends in user costs, and housing markets in these countries seem relatively more susceptible to adverse developments in fundamentals. Real house price declines among the slow movers are harder to explain, although ample supply, low home ownership, and less complete mortgage markets are likely factors. The impact of macroeconomic, prudential and structural policies on housing markets can be large and should be a factor in policy decisions.

Keywords: Housing prices, Europe, Economic indicators, Taxation, Interest rates, Monetary policy, Fiscal policy, Population, Demand, Supply, Economic models, Working Paper

Suggested Citation

Hoffmaister, Alexander W. and Banerji, Angana and Shi, Haiyan and Hilbers, Paul, House Price Developments in Europe: A Comparison (September 2008). IMF Working Papers, Vol. , pp. 1-64, 2008. Available at SSRN: https://ssrn.com/abstract=1266544

Alexander W. Hoffmaister

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Angana Banerji (Contact Author)

International Monetary Fund (IMF) ( email )

Haiyan Shi

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Paul Hilbers

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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