No Price Like Home: Global House Prices, 1870-2012
AbstractHow have house prices evolved over the long run? This paper presents annual house prices for 14 advanced economies since 1870. We show that real house prices stayed constant from the nineteenth to the mid-twentieth century, but rose strongly and with substantial cross-country variation in the second half of the twentieth century. Land prices, not replacement costs, are the key to understanding the trajectory of house prices. Rising land prices explain about 80 percent of the global house price boom that has taken place since World War II. Our findings have implications for the evolution of wealth-to-income ratios, the growth effects of agglomeration, and the price elasticity of housing supply.
CitationKnoll, Katharina, Moritz Schularick, and Thomas Steger. 2017. "No Price Like Home: Global House Prices, 1870-2012." American Economic Review, 107 (2): 331-53. DOI: 10.1257/aer.20150501
- C43 Index Numbers and Aggregation; leading indicators
- N10 Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: General, International, or Comparative
- N90 Regional and Urban History: General
- R31 Housing Supply and Markets