Regional variations in house prices and house price inflation in Britain, 1969‐1989

1989 ◽  
Vol 7 (4) ◽  
pp. 342-360 ◽  
2021 ◽  
pp. 0308518X2198894
Author(s):  
Peter Phibbs ◽  
Nicole Gurran

On the world stage, Australian cities have been punching above their weight in global indexes of housing prices, sparking heated debates about the causes of and remedies for, sustained house price inflation. This paper examines the evidence base underpinning such debates, and the policy claims made by key commentators and stakeholders. With reference to the wider context of Australia’s housing market over a 20 year period, as well as an in depth analysis of a research paper by Australia’s central Reserve Bank, we show how economic theories commonly position land use planning as a primary driver of new supply constraints but overlook other explanations for housing market behavior. In doing so, we offer an alternative understanding of urban housing markets and land use planning interventions as a basis for more effective policy intervention in Australian and other world cities.


1981 ◽  
Vol 13 (9) ◽  
pp. 1109-1124 ◽  
Author(s):  
M C Fleming ◽  
J G Nellis

A survey is made of all official and unofficial sources of statistics on house prices in the UK. This is followed by a critical appraisal of the evidence they provide about national and regional price levels and about house price inflation. Attention is focused on two crucial factors: the representativeness of the data and the heterogeneity of houses. It is concluded that incomplete coverage of all house transactions means that most series tend to overstate price levels and that intertemporal and interregional comparisons are sensitive to the composition by type of houses traded.


2020 ◽  
Vol 13 (2) ◽  
pp. 257-270
Author(s):  
Arvydas Jadevicius ◽  
Peter van Gool

Purpose This study is a practice undertaking examining three main concerns that currently dominate Dutch housing market debate: how long is the cycle, will the current house price inflation continue and is housing market in a bubble. With national house prices reaching record highs across all major cities, future market prospects became a topic of significant debate among policymakers, investors and the populace. Design/methodology/approach A triangulation of well-established academic methods is used to perform investigation. The models include Hodrick-Prescott (HP) filter, volatility autoregressive conditional heteroskedasticity (ARCH approximation) and right tail augmented Dickey–Fuller (Rtadf) test (bubble screening technique). Findings Interestingly, over the years from 1985 to 2019 research period, filtering extracts only one Dutch national housing cycle. This is a somewhat distinct characteristic compared to other advanced Western economies (inter alia the UK and the USA) where markets tend to experience 8- to 10-year gyrations. Volatility and Rtadf test suggest that current house prices in most Dutch cities are in excess of historical averages and statistical thresholds. House price levels in Almere, Amsterdam, The Hague, Groningen, Rotterdam and Utrecht are of particular concern. Originality/value Retail investors should therefore be cautious as they are entering the market at the time of elevated housing values. For institutional investors, those investing in long-term, housing in key Dutch metropolitan areas, even if values decline, is still an attractive investment conduit.


Significance The government in New Zealand, where the market is particularly buoyant, was the first to react in February. It now requires the Reserve Bank to consider house prices when setting monetary policy. Other governments and central banks have shown little sign of following suit. Impacts Calls are rising for the US Federal Reserve to taper its purchases of mortgage-backed securities, but it will remain cautious. Rising financial stability risks and house price booms increase the risk of insolvency for borrowers and non-performing-loans for banks. Higher house prices add indirectly to consumer price inflation if they push up rents, but this link takes time to materialise.


1985 ◽  
Vol 17 (5) ◽  
pp. 605-624 ◽  
Author(s):  
M Martens

Owner-occupation has become a major tenure form in Western Europe. Yet, relatively little is known about the way owner-occupation is provided, since most studies tend to concentrate only on the effects of different forms of state support for the tenure. This survey examines owner-occupied housing markets in five European countries, Britain, France, West Germany, Denmark, and the Netherlands. Their housing markets vary substantially, but differences are especially marked between Britain and the rest of Europe. Differences in owner-occupied housing markets between these countries arise in the timing of the expansion of owner-occupation; in the relation between the building industry and dominant forms of housing promotion; in the roles played by the market for secondhand housing and in the importance of mortgage finance. One common characteristic of all these countries, however, has been the appearance of house-price inflation during the 1970s. The rising long-term trend of house prices has been punctuated by periodic booms and slumps. Market instability has helped to cause the major crises of housing production that exist in all countries. The survey concludes by indicating the dilemmas under the current structures of provision for state policies aimed at expanding owner-occupation.


2018 ◽  
Vol 36 (6) ◽  
pp. 539-551 ◽  
Author(s):  
Petros Stavrou Sivitanides

Purpose The purpose of this paper is to validate and quantify the effect of key macroeconomic drivers on London house prices using annual data over the period 1983–2016. Design/methodology/approach Within this context, the authors estimate alternative error-correction and partial-adjustment models (PAMs), which have been widely used in the empirical literature in modelling the slow adjustments of house prices to demand and supply shocks. Findings The results verify the existence of a strong long-term relationship between London house prices and key macroeconomic variables, such as UK GDP, London population and housing completions. A key finding of the study relevant to the debate on the causes of the housing affordability crisis is that the results provide little evidence in support of the argument that user demand, which is captured in the author’s model by Greater London population, may have had a diminished role in driving house price inflation in London. Practical implications The practical and policy implications of the results are that increased homebuilding activity in London will undoubtedly help limit house price increases. Also, any potential reduction of immigration and economic growth due to Brexit will also have a similar effect. Originality/value The originality of this research lies in the use of annual data that may better capture the long-term effect of macroeconomic drivers on house prices and the estimation of such effects through both error-correction and partial-adjustment models.


2004 ◽  
Vol 189 ◽  
pp. 57-60 ◽  
Author(s):  
Ray Barrell ◽  
Simon Kirby ◽  
Rebecca Riley

House price inflation in the UK has been particularly high in recent years. This has led to much discussion concerning the future path of house price growth. Whether the future scenario involves a moderation or instead a sharp correction in house prices has important implications for the short to medium path of household consumption expenditure.


1984 ◽  
Vol 16 (2) ◽  
pp. 147-161 ◽  
Author(s):  
C Hamnett

In a recent paper in this journal, Thorns sought to relate together changes in the labour and domestic property markets in Britain since World War II. He argued that it was important to analyse the operation of these markets and the extent to which they operate to reinforce social inequalities. In this paper, it is argued that, although the issues Thorns raises are important ones, his analysis and conclusions are marred by his treatment of regional differences and trends in the rate of house price inflation over time. By generalising from data over a single year, Thorns sought to show that there was a strong link between the gains received from the labour market and those from the domestic property market. Although there is no evidence at the regional level to support Thorns's assertions regarding the growth of interregional differentials in average house prices over time (if anything the evidence shows the reverse), it is suggested that the regional scale may not be the most appropriate scale of analysis, and some evidence is presented which indicates the possibility of growing inner-city/suburban differentials. Finally, it is argued that the concentration on owner occupiers may well obscure the equally, if not more important, changes which are occurring in the distribution of owner occupiers and council tenants. It is argued that there is a growing social and spatial polarisation between the two main tenures at the intraurban level; some evidence from London is presented to support this.


2019 ◽  
Vol 20 (3) ◽  
pp. 546-572 ◽  
Author(s):  
Maciej Ryczkowski

This paper investigates the relationship between money/credit growth and house price inflation for a sample of twelve developed countries. The novel application of the continuous wavelet transform showed significant but time-varying linkages between these two variables. During quantitative easing in the United States and the United Kingdom, growth of respectively broad money and bank credit was leading house price inflation for the 2-8 years cycle. In contrast to this, the Bank of Japan and the European Central Bank either did not assign a separate role to house prices in their reaction functions or the two central banks were not capable to significantly increase house prices by extending money/credit during the business cycle. The significant co-movements of financial variables and house prices around booming episodes warn us that a new asset price boom might appear within the length of a business cycle as a consequence of overly expansionary monetary policy. In the euro area, the significant, long run, and close to a one-for-one link between growth of M3 and house price inflation is an argument for the monetary pillar of the European Central Bank. The present study contributes significantly to the literature by introducing a novel application of a continuous wavelet transform to study the housing prices in relation to money, credit and quantitative easing. The article uses a long-term dataset covering a period of almost half a century to analyse their varying relationship in the short-run to the long-run and from the historical perspective.


2012 ◽  
Vol 11 (10) ◽  
pp. 1117
Author(s):  
Tobias Duemmler

This paper is based on a traditional neoclassical approach to housing investment and our previous work carried out for Germany. In this study we check the relevance if the definition for the user costs of housing should be extended by an additional term which mirrors the credit constraints a household would be faced with for the U.S. economy. This extension term consists of the inflation gap between consumer and house price inflation multiplied with an average loan-to-value ratio and the real house prices. The empirical relevance of our finding is confirmed by a VECM using U.S. data. A time series for the user costs of housing in the U.S. is calculated.


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