House Price Developments in Europe: A Comparison

Author/Editor:

Paul Louis Ceriel Hilbers ; Angana Banerji ; Haiyan Shi ; Willy A Hoffmaister

Publication Date:

September 1, 2008

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 2008/211

Subject:

Housing Housing prices Inflation Mortgages Property tax

Frequency:

Biannually

English

Publication Date:

September 1, 2008

ISBN/ISSN:

9781451870695/1018-5941

Stock No:

WPIEA2008211

Pages:

64

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