2017
DOI: 10.1007/s11146-017-9602-7
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What Causes the Positive Price-Turnover Correlation in European Housing Markets?

Abstract: This paper examines what determines the correlation between prices and turnover in European housing markets. Using a panel vector autoregressive model, we find that there is a particularly strong feedback mechanism between prices and turnover. Momentum effects are another important reason why prices and turnover are correlated. Common underlying factors, such as GDP and interest rates, also explain part of the priceturnover correlation. The results in this paper imply that, to understand price and turnover dyn… Show more

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Cited by 14 publications
(13 citation statements)
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“…Finally, the impact of inflation and named price refers to the price index. The second category is considered to greatly affect housing prices because of the impact of the surrounding facilities (Droes & Francke, 2018;. Similar studies can be also seen in examining the spatial relationship among environmental health factors, neighborhood amenities, and house prices McCord, MacIntyre, Bidanset, Lo, & Davis, 2018).…”
Section: Real Estate Appraisal and Financial Engineering Theoriesmentioning
confidence: 86%
“…Finally, the impact of inflation and named price refers to the price index. The second category is considered to greatly affect housing prices because of the impact of the surrounding facilities (Droes & Francke, 2018;. Similar studies can be also seen in examining the spatial relationship among environmental health factors, neighborhood amenities, and house prices McCord, MacIntyre, Bidanset, Lo, & Davis, 2018).…”
Section: Real Estate Appraisal and Financial Engineering Theoriesmentioning
confidence: 86%
“…A paper by Dröes and Francke (2018) examined which factors determined the correlation between prices and turnover in European real estate markets. They used the panel vector autoregressive model and they discovered a strong feedback mechanism between prices and turnover.…”
Section: Theoretical and Methodological Basis Of Mortgage Market Researchmentioning
confidence: 99%
“…The Atlantic (2016) writes that during their lifetime Americans move on average three times as often as Europeans (based on data from the US Census Bureau and a survey within 16 European countries conducted by Re/Max Europe). Within Europe, the turnover rate also varies considerably across countries (Dröes and Francke, 2018). In addition to the low number of transactions relative to the housing stock, in some countries a high percentage of the transacted properties are new buildings that are automatically excluded from a repeat-sales index.…”
Section: How Are Cppis Computed?mentioning
confidence: 99%
“…The turnover rate for residential housing is defined byDröes and Francke (2018) as the ratio of sold units to the total housing stock.…”
mentioning
confidence: 99%