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Predicting Peaks and Troughs in Real House Prices

  • Linda Rousová
  • Paul van den Noord

OECD work prior to the financial crisis suggested that real prices in several housing markets had become vulnerable to a change in financial and economic conditions, with the risk of a subsequent downturn becoming increasingly possible, as proved to be the case. With corrections in many, but not all, housing markets having now occurred, and, in some countries, prices having rebounded rapidly in the low interest rate environment, the issue of whether prices are now close to another turning point is again of considerable policy interest. As a means of addressing this issue, probit models have been estimated to provide an indication of possible peaks and troughs in real house prices in 2011 and 2012, using data for 20 OECD countries. Predictions based on these models have been reported in OECD Economic Outlook, No. 89 and this paper provides information on the methodology underpinning these predictions. Comment prévoir les fluctuations des prix réels des logements ? Les travaux menés par l’OCDE avant la crise financière laissaient entendre que les prix réels sur plusieurs marchés du logement ne sauraient résister à une modification des conditions financières et économiques, alors que le risque que leur vulnérabilité n’entraîne une crise économique devenait de plus en plus probable, ainsi que les événements ultérieurs l’ont d’ailleurs démontré. Les prix s’étant désormais rétablis sur un grand nombre, bien que pas sur la totalité, des marchés du logement, et ayant même, dans certains pays, enregistré une remontée rapide favorisée par la faiblesse des taux d’intérêt, la question de savoir s’ils font aujourd’hui face à un nouveau changement de cap mobilise fortement l’intérêt des gouvernements. Pour tenter de répondre à cette question, des modèles probits, dont on estime qu’ils pourraient fournir une indication des fluctuations possibles des prix réels des logements en 2011 et 2012, ont été sollicités et utilisés avec des données concernant 20 pays de l’OCDE. Les prévisions établies sur la base de ces modèles ont été reproduites dans les Perspectives économiques de l'OCDE, n°89, et le présent document donne des informations sur la méthodologie employée à cet effet.

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Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 882.

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Date of creation: 13 Jul 2011
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Handle: RePEc:oec:ecoaaa:882-en
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