Publication

This paper analyzes housing prices in Europe and the US. It presents a composite indicator for Euro area housing prices and compares their evolution over the long run with that of the US. The main findings are: the Euro area aggregate index of real housing prices has risen almost as much as that of the US and is now (together with that of the US) about 40 percent above its 30-year average; over the last 30 years, the Euro area index for real housing prices has tended to follow that of the US quite closely, but with a lag of about two years; and the overvaluation (compared to a longer-term historical average) is even larger for the UK and Australia.