Research Catalog

Title

Recent House Price Developments [electronic resource]: The Role of Fundamentals / Nathalie Girouard ... [et al]

Publication

Paris : OECD Publishing, 2006.

Details

Additional Authors

• Girouard, Nathalie.
• Kennedy, Mike.
• van den Noord, Paul.
• André, Christophe.

Description

61 p.; 21 x 29.7cm.

Summary

In the vast majority of OECD economies, house prices in real terms have been moving up strongly since the mid-1990s. Because of the important role housing wealth has been playing during the current upswing, this paper will look more closely at what is underlying these developments for 18 OECD countries over the period from 1970 to the present, with a view to shedding some light on whether or not prices are in line with fundamentals. The paper begins by putting the most recent housing price run-ups in the context of the experiences of the past 35 years. It then examines current valuations against a range of benchmarks. It concludes with a review of the links between a possible correction of housing prices and real activity. The main highlights from this analysis are as follows: 1) The size and duration of the current real house price increases; the degree to which they have tended to move together across countries; and the extent to which they have disconnected from the business cycle are unprecedented. 2) Overvaluation of real house prices may only apply to a relatively small number of countries. However, the extent to which these prices look to be fairly valued depends largely on longer-term interest rates remaining at or close to their current low levels. 3) If house prices were to adjust downward, the historical record suggests that the drops might be large and that the process could be protracted, given the observed stickiness of nominal house prices and the current low rates of inflation.

Series Statement

OECD Economics Department Working Papers, 1815-1973 ; no.475

Uniform Title

OECD Economics Department Working Papers, no.475.

Subject

Economics

LCCN

10.1787/864035447847

OCLC

oecd-lib

Title

Recent House Price Developments [electronic resource]: The Role of Fundamentals / Nathalie Girouard ... [et al]

Imprint

Paris : OECD Publishing, 2006.

Series

OECD Economics Department Working Papers, 1815-1973 ; no.475

OECD Economics Department Working Papers, 1815-1973 ; no.475.

Connect to:

Full text online available onsite at NYPL

Indexed Term

Economics

Added Author

Girouard, Nathalie.

Kennedy, Mike.

van den Noord, Paul.

André, Christophe.

Other Standard Identifier

10.1787/864035447847 doi