## Figure 3.2.1. Housing Return Predictability

## Source details

**Canonical URL:** [Figure 3.2.1. Housing Return Predictability](https://www.imf.org/-/media/files/publications/gfsr/2018/april/chapter-3/pdf/boxfigure3-2-1.pdf)

## Other formats

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### Methodology
- Forecasting equation uses the current price-to-rent ratio to predict future capital gains in housing assets.
- Forecasting horizon ranges from 1 year to 10 years.
- The y-axis shows the R^2 from the forecasting equation, i.e., the proportion of variance in the future housing return explained by the current price-to-rent ratio.
- The median R^2 among countries in the sample is plotted.

### Key statistics (as shown on axes)
- Y-axis tick values: 0.00, 0.05, 0.10, 0.15, 0.20
- X-axis year/horizon values: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10

### Findings (visual summary)
- R^2 values (proportion of variance explained by current price-to-rent ratio) are shown for forecasting horizons from 1 year to 10 years.
- The plotted series is the median R^2 across countries in the sample.

*Source: IMF staff estimates.*

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_Source: https://www.imf.org/-/media/files/publications/gfsr/2018/april/chapter-3/pdf/boxfigure3-2-1.pdf_