Economic policy uncertainty and housing prices: evidence from Northern and Southern Europe

Nazif Durmaz, Shuyi Bian and Yihang Gu

International Journal of Housing Markets and Analysis, 2025, vol. 19, issue 3, 601-618

Abstract: PurposeThis study aims to examine the influence of economic policy uncertainty (EPU) on residential property prices across 10 distinct nations in Europe, specifically in Northern and Southern regions.Design/methodology/approachThe autoregressive distributed lag bounded cointegration test is used to carry out the empirical analysis.FindingsThe findings reveal that there is a stable long-term cointegration between house prices and their determining factors, including EPU, in the 10 nations. The outcomes further indicate that EPU has negative long- and short-term effects on house prices, apart from Spain, where uncertainty has a significant positive effect.Originality/valueThe sample period of nearly 40 years applied in this paper includes several business cycles, as well as the concluded global financial crisis, the Brexit process and the COVID-19 pandemic. These three important events potentially increased economic uncertainty across Southern and Northern Europe and the globe, thus making this study even more timely and vital.

Keywords: Housing prices; ARDL; Cointegration; Economic policy uncertainty; Southern Europe; Northern Europe (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijhmap:ijhma-10-2024-0157

DOI: 10.1108/IJHMA-10-2024-0157

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