Are houses overvalued in the Netherlands?
AbstractThe movement of the level of house prices in the Netherlands between 1980 and 2007 is explainable fairly well by fundamental supply and demand factors. Empirical research has shown that the overvaluation of approximately 10% that existed in 2003 shrunk to approximately 0% in 2007. This was not caused by downward correction of house prices, but by the circumstance that the increase of the actual house price between 2003 and 2007 lagged behind the increase of the long-term value of the house price. Therefore, this does not confirm the IMF's recently published research results, indicating that approximately 30% of the house price increase between 1997 and 2007 cannot be explained by fundamental factors.
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Bibliographic InfoPaper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Memorandum with number 200.
Date of creation: Apr 2008
Date of revision:
Find related papers by JEL classification:
- E39 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Other
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Housing Supply and Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-10-13 (All new papers)
- NEP-EEC-2008-10-13 (European Economics)
- NEP-GEO-2008-10-13 (Economic Geography)
- NEP-MAC-2008-10-13 (Macroeconomics)
- NEP-URE-2008-10-13 (Urban & Real Estate Economics)
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- Erik R. de Wit & Peter Englund & Marc Francke, 2010. "Price and Transaction Volume in the Dutch Housing Market," Tinbergen Institute Discussion Papers 10-039/2, Tinbergen Institute.
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