Scientific article

Measuring House Price Bubbles

Publication date2016

Using data for six metropolitan housing markets in three countries, this paper provides a comparison of methods used to measure house price bubbles. We use an asset pricing approach to identify bubble periods retrospectively and then compare those results with results produced by six other methods. We also apply the various methods recursively to assess their ability to identify bubbles as they form. In view of the complexity of the asset pricing approach, we conclude that a simple price‐rent ratio measure is a reliable method both ex post and in real time. Our results have important policy implications because a reliable signal that a bubble is forming could be used to avoid further house price increases.

  • Housing
  • Bubble
  • Overvaluation
  • Asset Pricing
  • Price‐Rent Ratio
  • Policy Measures
Citation (ISO format)
HOESLI, Martin E., BOURASSA, Steven, OIKARINEN, Elias. Measuring House Price Bubbles. In: Real estate economics, 2016. doi: 10.1111/1540-6229.12154
Main files (1)
Article (Submitted version)
ISSN of the journal1080-8620

Technical informations

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