Regional house price convergence in Spain during the housing boom

Francisco Blanco, Victor Martín and Guillermo Vazquez
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Francisco Blanco: Universidad Rey Juan Carlos, Spain
Victor Martín: Universidad Rey Juan Carlos, Spain
Guillermo Vazquez: Universidad Rey Juan Carlos, Spain
Authors registered in the RePEc Author Service: Víctor Martín

Urban Studies, 2016, vol. 53, issue 4, 775-798

Abstract: The aim of this paper is to identify convergence clubs in house prices among Spanish regions over the period 1995:Q1 to 2007:Q4 and to investigate which factors are responsible for club formation. Employing a novel regression-based convergence test proposed by Phillips and Sul (2007) we find that regional house prices do not converge to a common trend, which confirms the existence of some degree of segmentation in the Spanish housing market. The research results support the existence of convergence clubs, indicating that Spanish regions form four separate groups that converge to different house price levels. Results of an ordered logit model suggest that differences in population growth, size of the rental market, initial house supply and geographical situation have played a crucial role in determining club membership.

Keywords: club convergence; house price; housing boom; Spanish regions (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:urbstu:v:53:y:2016:i:4:p:775-798

DOI: 10.1177/0042098014565328

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