Explaining house price changes in Greece

Gounopoulos, Dimitrios, Merikas, Andreas G, Merika, Anna and Triantafyllou, Anna (2012) Explaining house price changes in Greece. Applied Financial Economics, 22 (7). pp. 549-561. ISSN 0960-3107

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Abstract

This paper develops an equilibrium model for the Greek housing market that incorporates both macroeconomic as well as country-specific variables that affect demand for and supply of houses. In the overall uprising phase of the 23-year period examined (1985Q1-2008Q1), our investigation of short-term fluctuations in real house prices and stock prices confirms the inverse relationship between movements in the housing price index and the stock exchange general index, identifies the direction of causality as running from the financial sector to the real sector, and finds that, following an exogenous shock, reversion to the long-run equilibrium is a rather slow process. Furthermore, we identify a fundamental shift in the behaviour of Greek homeowners, who appear to be moving away from the treatment of housing as consumption good, towards treating house purchases as investment.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences > HB Economic theory. Demography > HB0071 Economics as a science. Relation to other subjects
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Depositing User: Catrina Hey
Date Deposited: 09 Sep 2013 16:34
Last Modified: 09 Sep 2013 16:34
URI: http://sro.sussex.ac.uk/id/eprint/46074
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