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An Investigation of the Synchronization in Global House Prices

Author

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  • Martin Hoesli

    (University of Geneva - Geneva School of Economics and Management (GSEM); Swiss Finance Institute; University of Aberdeen - Business School)

Abstract

We review the main studies on house price synchronization and conduct an empirical analysis using OECD house price indices. We provide a discussion of the contributing factors of synchronization, with a focus on the demand and supply dimensions. Synchronization across both countries and cities is examined. We report that housing markets globally have become more synchronized, this being particularly clear for cities. Sustained demand for places that are attractive for financial motives but also for lifestyle and sometimes climate, combined with the concurrent fact that such places tend also to be supply-constrained, is likely to lead to more synchronization across markets. The conclusions are important for investors seeking to diversify their housing holdings internationally. The discussion also has policy implications.

Suggested Citation

  • Martin Hoesli, 2020. "An Investigation of the Synchronization in Global House Prices," Swiss Finance Institute Research Paper Series 20-06, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp2006
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    Cited by:

    1. Bhatt, Vipul & Kishor, N. Kundan, 2021. "(A)Synchronous Housing Markets of Global Cities," MPRA Paper 107175, University Library of Munich, Germany.
    2. Mikhail Stolbov & Maria Shchepeleva, 2023. "Sentiment-based indicators of real estate market stress and systemic risk: international evidence," Annals of Finance, Springer, vol. 19(3), pages 355-382, September.
    3. Cheng, Ruijie & Rajan, Ramkishen S., 2022. "House price decoupling in East Asia and the Pacific: Trilemma versus dilemma revisited," International Review of Economics & Finance, Elsevier, vol. 79(C), pages 518-539.

    More about this item

    Keywords

    Synchronization; Housing markets; House prices; Global liquidity; Housing supply; Housing demand; Magnet cities; Housing policy;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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