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The Effect of House Prices on Growth


  • Ewald Walterskirchen



The differences in growth rates between EU countries during the period 1995-2005 can be attributed in part to the responsiveness of consumption and residential building to house price and interest rate changes. Rising real house prices in the UK, Ireland, the Scandinavian countries and Spain accelerated residential building and stimulated private consumption through wealth effects. Using cross-country analysis, an increase of real house prices by 1 percent raised GDP growth by 0.15 percentage point.

Suggested Citation

  • Ewald Walterskirchen, 2006. "The Effect of House Prices on Growth," Austrian Economic Quarterly, WIFO, vol. 11(4), pages 173-179, December.
  • Handle: RePEc:wfo:wquart:y:2006:i:4:p:173-179

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    Cited by:

    1. Ewald Walterskirchen, 2010. "The Burst of the Real Estate Bubble – More Than a Trigger for the Financial Market Crisis," Austrian Economic Quarterly, WIFO, vol. 15(1), pages 86-93, April.

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