Fundamental Drivers of House Prices in Advanced Economies

IMF Working Papers, July 13, 2018

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Fundamental Drivers of House Prices in Advanced Economies

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Bibliographic details

• Authors: Nan Geng
• Published: July 13, 2018
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781484367629.001

Summary and scope

• House prices in many advanced economies have risen substantially in recent decades.
• Housing prices can diverge from their long-run equilibrium or sustainable levels, potentially followed by adjustments that impact macroeconomic and financial stability.
• The paper focuses on fundamentals expected to drive long run trends in house prices, including institutional and structural factors.
• The scale of potential valuation gaps is gauged on the basis of a cross-country panel analysis of house prices in 20 OECD countries.

Major themes and emphases

• Monitoring house prices and assessing whether they are sustainable is necessary because of potential macroeconomic and financial stability impacts.
• Emphasis on fundamentals that determine long-run trends rather than short-run cyclical drivers.
• Consideration of institutional and structural factors influencing housing markets.

Methodology and empirical approach

• Cross-country panel analysis of house prices in 20 OECD countries is used to gauge the scale of potential valuation gaps.

Key statistics and publication metadata

• Pages: 24
• Volume: 2018
• Issue: 164
• Series: Working Paper No. 2018/164
• DOI: https://doi.org/10.5089/9781484367629.001
• Stock No: WPIEA2018164
• ISBN: 9781484367629
• ISSN: 1018-5941

Subject classifications and keywords

• Subject: Asset prices, Disposable income, Financial institutions, Housing, Housing prices, Mortgages, National accounts, Prices
• Keywords: asset price movement, Asset prices, Disposable income, elasticities of housing supply, Global, house price, house price trend, House prices, Housing, housing investment, Housing markets, housing price, Housing prices, housing stock, interaction terms, long-run house price development, long-run house price trend, Mortgages, OECD countries, price, price correction, understanding housing price development, valuation gap, Valuation gaps, WP

Source: IMF Working Papers — "Fundamental Drivers of House Prices in Advanced Economies" by Nan Geng, July 13, 2018.

Content in this bundle

• Fundamental Drivers of House Prices in Advanced Economies, WP/18/164, June 2018
  • Fundamental Drivers of House Prices in Advanced Economies, WP/18/164, June 2018 (Markdown version)
  • Fundamental Drivers of House Prices in Advanced Economies, WP/18/164, June 2018 (PDF)