Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Is there a bubble in the Swedish housing market?
University West, School of Business, Economics and IT, Divison of Law, Economics, Statistics and Politics.ORCID iD: 0000-0002-5176-9253
2019 (English)In: Journal of European Real Estate Research, ISSN 1753-9269, E-ISSN 1753-9277Article in journal (Refereed) Epub ahead of print
Abstract [en]

Purpose This paper aims to investigate the presence of a housing bubble using Swedish data from 1986Q1-2016Q4 by using various methods. Design/methodology/approachFirst, the authors use affordability indicators and asset-pricing approaches, including the price-to-income ratio, price-to-rent ratio and user cost, supplemented by a qualitative discussion of other factors affecting house prices. Second, the authors use cointegration techniques to compute the fundamental (or long-run) price, which is then compared with the actual price to test the degree of Sweden'€™s housing price bubble during the studied period. Third, they apply the univariate right-tailed unit root test procedure to capture bursting bubbles and to date-stamp bubbles. Findings The authors find evidence for rational housing bubbles with explosive behavioral components beginning in 2004. These bubbles do not continuously diverge but instead periodically revert to their fundamental value. However, the deviation is persistent, and without any policy correction, it takes decades for real house prices to return to equilibrium.Originality/value The policy implication is that monetary policy designed to contain mortgage demand and thereby prevent burst episodes in the housing market must address external imbalances, as revealed in real exchange rate undervaluation. It is unlikely that current policies will stop the rise of house prices, as the growth of mortgage credit, improvement in Sweden’s international competitiveness and the path of interest rates are much more important factors.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2019.
Keywords [en]
VECM, Rational, Bubbles, Cointegration, Explosive, Fundamenta
National Category
Economics
Research subject
SOCIAL SCIENCE, Economics
Identifiers
URN: urn:nbn:se:hv:diva-13426DOI: 10.1108/JERER-03-2018-0013Scopus ID: 2-s2.0-85059539145OAI: oai:DiVA.org:hv-13426DiVA, id: diva2:1293794
Available from: 2019-03-05 Created: 2019-03-05 Last updated: 2019-04-04Bibliographically approved

Open Access in DiVA

No full text in DiVA

Other links

Publisher's full textScopus

Authority records BETA

Asal, Maher

Search in DiVA

By author/editor
Asal, Maher
By organisation
Divison of Law, Economics, Statistics and Politics
In the same journal
Journal of European Real Estate Research
Economics

Search outside of DiVA

GoogleGoogle Scholar

doi
urn-nbn

Altmetric score

doi
urn-nbn
Total: 113 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf