House Price Convergence: Evidence from India

Convergence des prix des logements: le cas indien

Rajesh Raj and Rath D.P.

Working papers from Banque de France

Abstract: The club convergence of sub-national house prices has so far been studied in respect of a number of advanced economies and emerging markets, but not for India. As such, this study contributes to this gap in literature by analyzing long-run convergence of regional house prices for a major emerging market. This study finds that city house prices in India do not converge to a single steady state, rather they form at least three clusters and converge to their respective steady state paths. The house prices are found to display conditional convergence driven by several factors, which inter alia include initial price levels, mortgage loans, and population density. The outcome of this study could be useful for policy makers in designing cluster-specific policy measures. It could also be useful for real estate fund managers, in achieving better fund diversification strategies, and the mortgage market forecasters, in reduced forecasting and modelling efforts.

La convergence long terme des prix des logements infranationaux a t tudi e jusqu' pr sent pour un certain nombre d' conomies avanc es et de pays mergents, mais pas pour l'Inde. Cette tude contribue combler cette lacune de la litt rature en analysant la convergence long terme des prix de l immobilier r gionaux pour un march mergent majeur. Cette tude montre que les prix des logements dans les villes indiennes ne convergent pas vers un tat stable unique, mais qu'ils forment plut t au moins trois groupes et convergent vers leurs tats stables respectifs. Les prix de l immobilier affichent une convergence conditionnelle d termin e par plusieurs facteurs, notamment les niveaux de prix initiaux, les pr ts hypoth caires et la densit de population. Les r sultats de cette tude pourraient tre utiles aux d cideurs politiques pour concevoir des mesures politiques sp cifiques aux clusters. Ils pourraient galement tre utiles aux gestionnaires de fonds immobiliers, pour mettre en place de meilleures strat gies de diversification des fonds, et aux pr visionnistes du march hypoth caire, pour r duire les efforts de pr vision et de mod lisation.

Keywords: House Prices; Mortgage Market; Loans; Convergence; Club; Sub-National; India; Prix des maisons; march hypoth caire; pr ts; convergence; club; sous-national; Inde (search for similar items in EconPapers)
JEL-codes: O18 R21 R3 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2022
New Economics Papers: this item is included in nep-ure
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