Has There Actually Been a Sustained Increase in the Synchronization of House Price (and Business) Cycles across Countries?

William Miles

Journal of Housing Economics, 2017, 36, 25-43

Co-movement between house prices across different countries has important implications for global investors. I employ a new data set on international house prices to examine home value co-movements in G-7 nations. I find linkages that vary through time. In some periods, the correlations are negative, while at other times, these co-movements reach all-time highs. This pattern is consistent with previous research on contagion for other financial assets. Further investigation reveals, however, that contrary to some previous findings, there has not been a secular increase in house price co-movement over the last four decades.