The Price-Turnover Relationship in European Housing Markets
||The Price-Turnover Relationship in European Housing Markets
||22nd Annual European Real Estate Society Conference in Istanbul, Turkey
||This paper examines what determines the relation between prices and turnover in European housing markets. We estimate this relationship using a panel vector error correction model. We focus on the role of path dependency, direct feedback, mortgage market indicators, and several other macro-economic indicators. We find that there is particularly strong direct feedback between prices and turnover. Also the mortgage market indicators, such as the outstanding mortgage loans to GDP, play an important role. Prices, turnover, the outstanding mortgage balance to GDP, and the level of GDP are cointegrated. Those markets with the strongest feedback mechanism between prices and turnover are also those markets which are the most volatile.
||price-turnover relationship, credit constraints, nominal loss aversion, cointegration
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||Housing Markets & Economics II
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