International dimensions of housing markets
File(s)
Accepted version
Author(s)
Badarinza, Cristian
Ramadorai, Tarun
Type
Journal Article
Abstract
We make the case that an international perspective on housing markets can help us understand why house prices and transactions volumes sometimes vary in ways that cannot easily be attributed to local economic factors. We first document cross-country and cross-time variation in house price-to-income ratios, and selectively discuss a growing literature which quantifies how international capital flows affect domestic housing markets. While this literature helps rationalize some of the rhetoric on globalization's effects on housing markets, it seems difficult at first glance to attribute price variation at the aggregate housing market level to the relatively small absolute magnitudes of cross-border housing capital flows. We argue using a search and matching framework that housing market frictions can magnify the effect of seemingly modest shocks and lead to more widespread reverberation through the housing market, linking local outcomes to the global distributions of wealth, risk, and productivity.
Date Issued
2025-09-01
Date Acceptance
2025-08-07
Citation
Journal of Economic Perspectives, 2025, 39 (3), pp.87-106
ISSN
0895-3309
Publisher
American Economic Association
Start Page
87
End Page
106
Journal / Book Title
Journal of Economic Perspectives
Volume
39
Issue
3
Copyright Statement
Copyright 2025 American Economic Association. This is the author’s accepted manuscript made available under a CC-BY licence in accordance with Imperial’s Research Publications Open Access policy (www.imperial.ac.uk/oa-policy)
License URL
Publication Status
Published
Date Publish Online
2025-08-07