Post crisis housing markets: a comparative review

During the last two years members of the working group have responded to questionnaires on how housing markets and their governance have changed since the financial crisis across a range of European and comparable industrialised countries. This paper brings together the findings in a form that we hope will be published as the third in our series monitoring change. During the upswing all countries followed more or less the same path but the crisis hit countries at different times, to a different extent and for shorter or longer periods. As a result housing market adjustments have also been different. This paper divides the countries into three groups: those where real house prices have risen since the crisis; those where nominal prices have risen but real house prices are still lower; and those where both nominal and real prices are down – within this group there is a subset where prices are still declining. Using the responses to the questionnaire we examine how finance and housing markets have developed since 2007 – with particular emphasis on levels of real investment and their relationship to financial and real economy tensions. We update the evidence on government responses and clarify the impact that the crisis and the subsequent economic downturns in many countries have had on the structure of the financial industry, its activities and the regulatory framework that it faces. Finally we ask whether there is agreement about both causes and consequences.