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House Price Developments in Europe

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Author Info

  • Paul Louis Ceriel Hilbers
  • Angana Banerji
  • Haiyan Shi
  • Alexander W. Hoffmaister

Abstract

House prices in Europe have shown diverging trends, and this paper seeks to explain these differences by analyzing three groups of countries: the "fast lane", the average performers, and the slow movers. Price movements in the first two groups are found to be driven mostly by income and trends in user costs, and housing markets in these countries seem relatively more susceptible to adverse developments in fundamentals. Real house price declines among the slow movers are harder to explain, although ample supply, low home ownership, and less complete mortgage markets are likely factors. The impact of macroeconomic, prudential and structural policies on housing markets can be large and should be a factor in policy decisions.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 08/211.

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Length: 64
Date of creation: 01 Sep 2008
Date of revision:
Handle: RePEc:imf:imfwpa:08/211

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Related research

Keywords: Housing prices; Economic indicators; Taxation; Interest rates; Economic models; mortgage; housing markets; mortgage interest; property tax; home ownership; mortgage markets; tax revenues; property taxes; housing finance; capital gains tax; mortgage market; personal income tax; interest payments; estate taxes; mortgage interest payments; housing supply; real estate tax; mortgage lending; tax treatment; mortgage-backed securities; housing stocks; wealth taxes; personal income tax rate; mortgage loans; mortgages; inheritance tax; stamp duties; taxation issues; mortgage loan; capital gains taxes; mortgage interest rate; income taxes; residential property tax; tax change; housing finance sector; mortgage banks; property tax rates; mortgage rates; homeownership; mortgage rate; property tax revenues; mortgage interest rates; home financing; foreclosures; tax purposes; tax liabilities; mortgage debt; housing loans; higher interest rates; estate taxation; mortgage finance; housing subsidies; housing finance systems; mortgage payments; personal income taxes; mortgage banking; rent subsidies; tax deferral; income tax net; mortgage interest payment; current tax year; mortgage credit; individual income tax; income tax rates; tax exemptions; mortgage interests; housing taxation; foreclosure; mortgage institutions; tax arrangements; rate of income tax; income tax deductions; tax deductions; mortgage interest deduction;

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References

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Citations

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Cited by:
  1. Thomas Hemmelgarn & Gaetan Nicodeme & Ernesto Zangari, 2011. "The Role of Housing Tax Provisions in the 2008 Financial Crisis," Taxation Papers 27, Directorate General Taxation and Customs Union, European Commission.
  2. Setzer, Ralph & van den Noord, Paul & Wolff, Guntram B., 2011. "Heterogeneity in money holdings across euro area countries: The role of housing," European Journal of Political Economy, Elsevier, vol. 27(4), pages 764-780.
  3. Alessio Ciarlone, 2012. "House price cycles in emerging economies," Temi di discussione (Economic working papers) 863, Bank of Italy, Economic Research and International Relations Area.
  4. Fabio C. Bagliano & Claudio Morana, 2008. "Permanent and Transitory Dynamics in House Prices and Consumption: Cross-Country Evidence," Working papers 2, Former Department of Economics and Public Finance "G. Prato", University of Torino.
  5. Alessio Ciarlone, 2012. "Wealth effects in emerging economies," Temi di discussione (Economic working papers) 843, Bank of Italy, Economic Research and International Relations Area.
  6. Thomas Y. Mathä & Alessandro Porpiglia & Michael Ziegelmeyer, 2014. "Wealth differences across borders and the effect of real estate price dynamics: Evidence from two household surveys," BCL working papers 90, Central Bank of Luxembourg.
  7. Ferrara, L. & Vigna, O., 2009. "Cyclical relationships between GDP and housing market in France: Facts and factors at play," Working papers 268, Banque de France.
  8. Christophe André, 2010. "A Bird's Eye View of OECD Housing Markets," OECD Economics Department Working Papers 746, OECD Publishing.
  9. Koetter, Michael & Poghosyan, Tigran, 2010. "Real estate prices and bank stability," Journal of Banking & Finance, Elsevier, vol. 34(6), pages 1129-1138, June.
  10. Samya Beidas-Strom & Weicheng Lian & Ashwaq Maseeh, 2009. "The Housing Cycle in Emerging Middle Eastern Economies and its Macroeconomic Policy Implications," IMF Working Papers 09/288, International Monetary Fund.

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