Rents and House Prices in the Portuguese Residential Real Estate Market

Sérgio Meira () and José Costa ()
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Sérgio Meira: Mestrado em Gestão - FEP

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: To better understand the evolution of real estate prices and rents in Portugal, in this paper we examine the Portuguese rental market by comparing house prices of Portuguese homes and rents paid by Portuguese people who are living in rented homes. The literature regarding rent and house prices agree that these variables should be positively correlated. We use time series indexes of both rent prices and house prices to study the long-term relationship between them, using the Engel-Granger Co-integration Model, and to determine if we can predict future changes in one of the variables using the other, using correlation analysis and Granger causality tests. Since there is a lack of studies focusing on the Portuguese real estate market, this study tries to open the door for future analysis in this segment.

Keywords: Portuguese real estate market; House prices; Rent prices; Co-integration; Granger Causality (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2019-12
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Persistent link: https://EconPapers.repec.org/RePEc:por:fepwps:618

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