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What Drives House Prices in Australia? A+L4584 Cross-Country Approach, Shengzu Wang, Patrizia Tumbarello

This paper analyzes the factors driving house prices in Australia from a cross-country perspective using several approaches. It uses a cointegration technique to estimate the long-run equilibrium house prices in Australia, New Zealand, and Canada and assesses the extent of a possible disequilibrium. It also presents an event analysis to shed some light on the link between house prices, capital inflows and the terms of trade. The econometric analysis suggests an overvaluation of 5-10 percent depending on the model specification. Event analysis indicates that terms of trade shocks were associated with larger increases in house prices in Australia, than in the case of strong capital inflow episodes
Table Of Contents
Cover Page; Title Page; Copyright Page; Contents; I. Introduction and Main Message; 1. Percent Deviation from Long-term Average Levels; II. Recent Developments in House Prices and Long-Run Stylized Facts; 1. Determinants of House Prices-Graphic Analysis; 2. Event Analysis: House Price Changes During Episodes of Terms of Trade Shock; 3. Event Analysis: House Price Changes During Episodes of Large Capital Inflows; 4. Advanced Economies: Post-Capital-Inflow GDP, Selected Macroeconomic Variables, and Policy Indicators; III. The Econometric Analysis; 2. Determinants of Equilibrium House Prices
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (39 p.)
Specific Material Designation
Form Of Item

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