Repository logo
 

Housing market in Israel: Is there a bubble?

Published version
Peer-reviewed

Type

Article

Change log

Authors

Gonzalez-Martinez, AR 

Abstract

House prices in Israel have registered unprecedented growth rates in the last few years. At first glance, these hikes could be explained by the evolution of fundamentals such strong population growth and favourable macroeconomic conditions, i.e. low interest rates. However, further investigation is needed in order to explore whether there is a misalignment between house prices and their fundamentals. Firstly, this paper investigates the role of construction costs in the evolution of house prices. Secondly, this contribution decomposes the “price-to-rent” ratio into fundamentals, frictions and bubble episodes for a better understanding of the recent trends of the market.

Description

Keywords

house prices, housing bubble, cointegration, Israel

Journal Title

Panoeconomicus

Conference Name

Journal ISSN

1452-595X
2217-2386

Volume Title

64

Publisher

Savez Ekonomista Vojvodine