What Drives Housing Prices Down? Evidence from an International Panel
-
Konstantin A. Kholodilin
,
Jan-Oliver Menz
Summary
In this study, we suggest an explanation for the low growth rates of real housing prices in Canada and Germany in comparison to other OECD countries over the period 1975-2005. We show that the long-run development of housing markets is determined by real disposable per-capita income, the real long-term interest rate, population growth, and urbanization. The differential development of real housing prices in Canada and Germany is attributed to the fundamentals in these two countries. Canada and Germany are characterized by relatively low average growth rates of real disposable income and relatively high interest rates, resulting in depressed housing prices over a long period of time. Institutional structure accentuates these tendencies. Given the importance of housing wealth for private consumption, our paper aims at drawing the attention of policymakers to the necessity of preventing not only overheating but also overcooling of the housing market that entails lower economic growth rate.
© 2010 by Lucius & Lucius, Stuttgart
Articles in the same Issue
- Inhalt / Contents
- Abhandlungen/Original Papers
- Erwartete externe Effekte und Wahlverhalten: Das Beispiel der Münchner Allianz-Arena / Expected External Effects and Voting: The Case of the Munich Allianz-Arena
- Fields of Training, Plant Characteristics and the Gender Wage Gap in Entry Wages Among Skilled Workers – Evidence from German Administrative Data
- International Financial Competitiveness and Incentives to Foreign Direct Investment
- What Drives Housing Prices Down? Evidence from an International Panel
- Work Effort During and After Employment Probation: Evidence from German Personnel Data
- Human Capital Externalities and Growth of High- and Low-Skilled Jobs
- Erhöhung der Mehrwertsteuer für Lebensmittel: Budget- und Wohlfahrtseffekte für Konsumenten / Increase of the Value Added Tax (VAT): Budget- and Welfare- Effects for Consumers
- Buchbesprechungen / Book Reviews
Articles in the same Issue
- Inhalt / Contents
- Abhandlungen/Original Papers
- Erwartete externe Effekte und Wahlverhalten: Das Beispiel der Münchner Allianz-Arena / Expected External Effects and Voting: The Case of the Munich Allianz-Arena
- Fields of Training, Plant Characteristics and the Gender Wage Gap in Entry Wages Among Skilled Workers – Evidence from German Administrative Data
- International Financial Competitiveness and Incentives to Foreign Direct Investment
- What Drives Housing Prices Down? Evidence from an International Panel
- Work Effort During and After Employment Probation: Evidence from German Personnel Data
- Human Capital Externalities and Growth of High- and Low-Skilled Jobs
- Erhöhung der Mehrwertsteuer für Lebensmittel: Budget- und Wohlfahrtseffekte für Konsumenten / Increase of the Value Added Tax (VAT): Budget- and Welfare- Effects for Consumers
- Buchbesprechungen / Book Reviews
