Making Sense of Increased Synchronization in Global House Prices

John Duca

No 1911, Working Papers from Federal Reserve Bank of Dallas

Abstract: Evidence indicates that house prices have become somewhat more synchronized during this century, likely reflecting more correlated movements in long-term interest rates and macroeconomic cycles that are related to trends in globalization and international portfolio diversification. Nevertheless, the trend toward increased synchronization has not been continuous, reflecting that house prices depend on other fundamentals, which are not uniform across countries or cities. Theory and limited econometric evidence indicate that the more common are fundamentals, the more in-synch house price cycles will become and the more substitution effects may matter. In addition, real estate markets that are open to immigration and foreign investment have become more sensitive to shifts in the international demand for property by migrants or investors.

Keywords: House prices; synchronization; star cities; international capital flows (search for similar items in EconPapers)
JEL-codes: R0 R20 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2019-10-09
New Economics Papers: this item is included in nep-ifn, nep-opm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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DOI: 10.24149/wp1911

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