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Evolution of Housing Prices in Chile

Author

Listed:
  • Eric Parrado H. /
  • Paulo Cox P.
  • Marcelo Fuenzalida C.

Abstract

The availability of real estate data is clearly limited in Chile, which makes more complex the discussion of the possible vulnerabilities of households and the financial sector to risks arising from real estate markets. This paper proposes a set of housing price indicators for measuring the potential pressures that could be developing in the credit market. Using these price measures, we find that the recent sustained rise in home prices coincides with the sustained increase in disposable income and the decreasing trend of long-term interest rates, factors that have strongly driven the expansion of mortgage loans.

Suggested Citation

  • Eric Parrado H. / & Paulo Cox P. & Marcelo Fuenzalida C., 2009. "Evolution of Housing Prices in Chile," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 12(1), pages 51-68, April.
  • Handle: RePEc:chb:bcchec:v:12:y:2009:i:1:p:51-68
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    References listed on IDEAS

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    1. Case, Karl E & Shiller, Robert J, 1989. "The Efficiency of the Market for Single-Family Homes," American Economic Review, American Economic Association, vol. 79(1), pages 125-137, March.
    2. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    3. Robert J. Shiller, 1991. "Arithmetic Repeat Sales Price Estimators," Cowles Foundation Discussion Papers 971, Cowles Foundation for Research in Economics, Yale University.
    4. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    5. Claudio Borio & Patrick McGuire, 2004. "Twin peaks in equity and housing prices?," BIS Quarterly Review, Bank for International Settlements, March.
    6. Paul Louis Ceriel Hilbers & Lisbeth S Zacho & Qin Lei, 2001. "Real Estate Market Developments and Financal Sector Soundness," IMF Working Papers 01/129, International Monetary Fund.
    7. Raphael Bergoeing & Felipe Morandé & Raimundo Soto, 2002. "Asset Prices in Chile: Facts and Fads," Central Banking, Analysis, and Economic Policies Book Series,in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Se (ed.), Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 8, pages 235-278 Central Bank of Chile.
    8. Eugenio Figueroa & George Lever, 1992. "Determinantes del precio de la vivienda en Santiago: Una estimación hedónica," Estudios de Economia, University of Chile, Department of Economics, vol. 19(1 Year 19), pages 67-84, June.
    9. Takatoshi Ito & Tokuo Iwaisako, 1996. "Explaining Asset Bubbles in Japan," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 14(1), pages 143-193, July.
    10. Robert Gillingham, 1975. "Place to Place Rent Comparisons," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 4, number 1, pages 153-178 National Bureau of Economic Research, Inc.
    11. Guy Debelle, 2004. "Macroeconomic implications of rising household debt," BIS Working Papers 153, Bank for International Settlements.
    12. Palmquist, Raymond B., 1979. "Hedonic price and depreciation indexes for residential housing: A comment," Journal of Urban Economics, Elsevier, vol. 6(2), pages 267-271, April.
    13. David de Ferranti & Guillermo E. Perry & William Foster & Daniel Lederman & Alberto Valdés, 2005. "Beyond the City: The Rural Contribution to Development," World Bank Publications, The World Bank, number 7328.
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    Cited by:

    1. Inder J Ruprah & Luis T Marcano, 2007. "A Meta-Impact Evaluation of Social Housing Programs: The Chilean Case," OVE Working Papers 0207, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
    2. Alejandro Micco & Eric Parrado & Bernardita Piedrabuena & Alessandro Rebucci, 2012. "Housing Finance in Chile: Instruments, Actors, and Policies," IDB Publications (Working Papers) 3965, Inter-American Development Bank.
    3. Paulo Cox & Eric Parrado & Jaime Ruiz-Tagle, 2006. "Distribution of Assets, Debt, and Income of Chilean Households," Working Papers Central Bank of Chile 388, Central Bank of Chile.

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