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Regional house price convergence in Spain during the housing boom

Author

Listed:
  • Francisco Blanco

    (Universidad Rey Juan Carlos, Spain)

  • Victor Martín

    (Universidad Rey Juan Carlos, Spain)

  • Guillermo Vazquez

    (Universidad Rey Juan Carlos, Spain)

Abstract

The aim of this paper is to identify convergence clubs in house prices among Spanish regions over the period 1995:Q1 to 2007:Q4 and to investigate which factors are responsible for club formation. Employing a novel regression-based convergence test proposed by Phillips and Sul (2007) we find that regional house prices do not converge to a common trend, which confirms the existence of some degree of segmentation in the Spanish housing market. The research results support the existence of convergence clubs, indicating that Spanish regions form four separate groups that converge to different house price levels. Results of an ordered logit model suggest that differences in population growth, size of the rental market, initial house supply and geographical situation have played a crucial role in determining club membership.

Suggested Citation

  • Francisco Blanco & Victor Martín & Guillermo Vazquez, 2016. "Regional house price convergence in Spain during the housing boom," Urban Studies, Urban Studies Journal Limited, vol. 53(4), pages 775-798, March.
    • Handle: RePEc:sae:urbstu:v:53:y:2016:i:4:p:775-798
    DOI: 10.1177/0042098014565328
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    References listed on IDEAS

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    3. Holmes, Mark J. & Otero, Jesús & Panagiotidis, Theodore, 2019. "Property heterogeneity and convergence club formation among local house prices," Journal of Housing Economics, Elsevier, vol. 43(C), pages 1-13.
    4. Mateusz Tomal, 2022. "Testing for overall and cluster convergence of housing rents using robust methodology: evidence from Polish provincial capitals," Empirical Economics, Springer, vol. 62(4), pages 2023-2055, April.
    5. Gil, Jose M. & Montañés, Antonio & Vásquez-González, Bernardo, 2023. "Are prices converging in the global sawnwood market?," Forest Policy and Economics, Elsevier, vol. 155(C).
    6. Christian Reiner & Robert Musil, 2023. "The regional variation of a housing boom. Disparities of land prices in Austria, 2000–2018 [Die regionale Differenzierung eines Immobilien-Booms. Disparitäten der Baulandpreise in Österreich, 2000–," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 43(1), pages 125-146, April.
    7. Sidong Zhao & Kaixu Zhao & Ping Zhang, 2021. "Spatial Inequality in China’s Housing Market and the Driving Mechanism," Land, MDPI, vol. 10(8), pages 1-33, August.
    8. Harry Aginta, 2021. "Spatial dynamics of consumer price in Indonesia: convergence clubs and conditioning factors," Asia-Pacific Journal of Regional Science, Springer, vol. 5(2), pages 427-451, June.
    9. Sala-Ríos, Mercé & Farré-Perdiguer, Mariona & Torres-Solé, Teresa, 2018. "How do Housing Prices and Business Cycles Interact in Spain? An Empirical Analysis/¿Cómo interactúan los precios de la vivienda y el ciclo económico en España? Un análisis empírico," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 36, pages 897-920, Septiembr.

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