House Price Convergence: Evidence from India

Raj Rajesh and Deba Prasad Rath

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.

Keywords: House Prices; Mortgage Market; Loans; Convergence; Club; Sub-National; India (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
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:893

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