How Long Do Housing Cycles Last? a Duration Analysis for 19 OECD Countries

IMF Working Papers, October 1, 2011

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Examines the duration of house price upturns and downturns over the last 40 years for 19 OECD countries.
Provides two complementary sets of results: average length and length distribution of housing cycle phases.

On average, upturns are longer than downturns.
The average difference between upturn and downturn length disappears once the last house price boom is excluded.
In terms of length distribution:
- Upturns (but not downturns) are more likely to end as their duration increases.
- This observed duration dependence for upturns is consistent with a boom-bust view of house price dynamics, where booms represent departures from fundamentals that are increasingly difficult to sustain.