The Quest for Stability in Housing Markets

Author:Hites Ahir
Pages:4-9
SUMMARY

Recent developments in global house prices have led to seemingly contradictory concerns about both overheating and slow recovery, reflecting house price booms in some countries and declining prices in others. This note discusses developments in global housing markets since the Great Recession- drawing on IMF staff assessments- and it also discusses attempts by policymakers to maintain stability... (see full summary)

 
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Volume 17, Number 1 March 2016
www.imf.org/researchbulletin
B U L L E T I N
1
The Quest for Stability in Housing Markets
Hites Ahir
Recent developments in g lobal house prices have led to seemingly
contradictory concer ns about both overheating and slow
recovery, refle cting house price boom s in some countries and
declining prices in others . This note discusses developments
in global housing market s since the Great Recession—
drawing on IMF staff as sessments—and it also discusses
attempts by policymak ers to maintain stability in housing markets through
macroprudentialpolicies.
Housing Markets: A Global Overview
On average, global house prices conti nue to march upward slowly (IMF 2016).
The IMF’s Global House Price Index—a simple average of real house price s for
64 countries—has ed ged higher for the past six teen quarters (Figure 1). There
is also a clear shi ft in momentum: between mid-2007 and mid-2012, far more
countries had declin ing real house prices than increasing prices , but since
mid-2012, these trends have reversed.
Explaining the Recent Slump in Investment:
The Role of Expected Demand and Uncertainty*
Matthieu Bussière, Laurent Ferrara, and Juliana Milovich
The recent weakness in bu siness
investment among advanced
economies has revived inte rest
in investment models and ha s
opened a debate on the main
drivers of the “inves tment
slump” and what the policy response should be , if any. In particular, it is essential
to assess precise ly whether the investment slump stems mos tly from weak aggregate
demand, financ ial constraints or uncertainty, as these different e xplanatory
factors have different polic y implications. This paper presents an empirica l
investigation of the main determinant s of business investment for a panel of 22
advanced economies. The m ain contribution is that we present re sults from an
augmented accelerator mode l using vintage forecast data as a measure of exp ected
demand and show that this for ward-looking variable goes a long way in e xplaining
In This Issue
1 Explaining the Recent
Slump in Investment:
The Role of Expected
Demand and Uncertainty
1 The Qu est for Stability
in Housing Markets
9 Q&A: Seven Questions on
Estimating the Monetary
Transmission Mechanism
in Low-Income Countries
14 IMF Working Papers
18 IMF Economic Review
19 Recommended Readings
from IMF Publications
20 Staff Discussion Notes
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Research Summaries
* This articl e summarizes the Banque d e France Working Paper No. 571. The views presented in
this paper are those of t he authors and do not necessa rily reflect thos e of the Banque de France or
the Eurosystem.

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