House Price Synchronicity, Banking Integration, and Global Financial Conditions

Author/Editor:

Adrian Alter ; Jane Dokko ; Dulani Seneviratne

Publication Date:

November 28, 2018

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

We examine the relationship between house price synchronicity and global financial conditions across 40 countries and about 70 cities over the past three decades. The role played by cross-border banking flows in residential property markets is examined as well. Looser global financial conditions are associated with greater house price synchronicity, even after controlling for bilateral financial integration. Moreover, we find that synchronicity across major cities may differ from that of their respective countries’, perhaps due to the influence of global investors on local house price dynamics. Policy choices such as macroprudential tools and exchange rate flexibility appear to be relevant for mitigating the sensitivity of domestic housing markets to the rest of the world.

Series:

Working Paper No. 18/250

English

Publication Date:

November 28, 2018

ISBN/ISSN:

9781484385692/1018-5941

Stock No:

WPIEA2018250

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

42

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