Long abstract
House prices and economic activity, EO68 ch.6
OECD Economic Outlook No. 68, Chapter 6. In many OECD countries, movements in real house prices have been closely correlated with the business cycle. Strong increases in property values were associated with the overheating in the late 1980s in several countries, and are widely considered to have contributed significantly to an unsustainable expansion in demand. With house prices rising more rapidly than most other prices in several Member countries in the second half of the 1990s, their potential macroeconomic impact is again becoming an important issue. In the United States for instance, the contribution of real estate developments to the current economic expansion has been emphasised recently; house price developments are being scrutinised in the United Kingdom as advanced indicators of demand pressure; in several smaller European countries, the potential impact of booming property values on demand has been a matter of concern. |
