The Unassuming Economist

On cross-country:

• House prices and rents went up in Q3 2024 – Eurostat
• House prices up by 2.6% in the euro area – Eurostat

Working papers and conferences:

• Drivers and Effects of Residence and Citizenship by Investment – IMF
• Was China’s Housing Boom a Bubble? – St Louis Fed
• Chinese Housing Market Sentiment Index: A Generative AI Approach and An Application to Monetary Policy Transmission – IMF
• House Prices and Systemic Events Over the Last Six Centuries – SSRN
• House Relistings and Economic Cycles – SSRN
• Wealth and Risk Attitude: Evidence from a House Price Hike Natural Experiment – SSRN
• House Price Markups and Mortgage Defaults – SSRN

On the US—developments on house prices, rent, permits and mortgage:    

• Zillow predicts 2025’s hottest real estate markets – Axios
• The Best Markets for First-Time Homebuyers in 2025 Revealed – Realtor.com
• U.S. Mortgage Rates Climb to Highest Since July. More expensive mortgages are a drag on a full-fledged housing recovery, economists say – Wall Street Journal
• Residential Construction Loan Volumes Decline Over the Third Quarter – NAHB
• The U.S. Has More Fancy Apartments Than It Is Able to Fill. Real-estate developers have built a glut of high-end properties instead of badly needed affordable housing – Wall Street Journal
• 83% of Outstanding Mortgage Debt Has a Sub-6% Rate – Realtor.com
• Housing market shift: 9 states where housing inventory is giving buyers more power. 9 states are back above pre-pandemic housing inventory levels, according to ResiClub’s monthly housing inventory report. – Fast Company
• America’s Housing Crisis: A Federal Policy Agenda for Expanding Supply and Affordability – George Bush Presidential Center
• 2nd Look at Local Housing Markets in December. Likely Sales up Year-over-year for 3rd Consecutive Month – Calculated Risk
• Part 1: Current State of the Housing Market; Overview for mid-January 2025 – Calculated Risk
• Part 2: Current State of the Housing Market; Overview for mid-January 2025 – Calculated Risk
• Residential Construction Inputs Price Growth Slows in 2024 – NAHB
• Single-Family Permits Up in November 2024 – NAHB
• Housing Inflation Moderates Amid Higher Energy Costs – NAHB
• Mortgage Applications Increase in Latest MBA Weekly Survey – MBA
• Home Price Growth Reaccelerates in Fourth Quarter – Fannie Mae

On the US—other developments:    

• ‘I Don’t Think There’s Much Left’: L.A. Fires Force Thousands to Look for Temporary Housing. Displaced Los Angeles residents face tough search for temporary and longer-term accommodations – Wall Street Journal
• Wildfires Will Deepen Housing Shortage in Los Angeles. With so many people displaced and looking for rentals, the region’s housing options could grow even scarcer and more expensive. – New York Times
• Their homes torched amid a housing crisis, L.A. residents wonder where to go. With thousands of houses destroyed by fire, the most populous county in the United States must confront the fraught logistics of rebuilding. – Washington Post
• Wealthy Homeowners and Their Insurers Turn to Hired Help to Fight L.A. Wildfires. As fires become more frequent and expensive, some insurers pay for private firefighting crews – Wall Street Journal
• LA fire victims fear new housing crisis – BBC
• Economic Toll of Los Angeles Fires Goes Far Beyond Destroyed Homes. The ongoing disaster will affect residents’ health, local industries, public budgets and the cost of housing for years to come. – New York Times
• The country needs to build homes and community like Jimmy Carter – Brookings
• Update: The Housing Bubble and Mortgage Debt as a Percent of GDP – Calculated Risk
• Housing Sentiment Finishes 2024 Higher Despite December Dip. Mortgage Rate Optimism Primary Driver of Year-over-Year Improvement – Fannie Mae
• Questioning the Housing Crisis: Recap and Wrap-Up – Cato Institute
• Three-Quarters of Americans View Homeownership as Part of the American Dream – Realtor.com
• How is climate change impacting home insurance markets? – Brookings
• Surprising Illinois City Becomes the Hottest Housing Market for the First Time – Realtor.com 
• Biden-⁠Harris Administration Takes Final Actions to Build More Housing and Bolster Renter Protections – White House
• First-Time Homeownership Became Less Affordable Across Most of the United States in Recent Years – Kansas City Fed

On Australia and New Zealand:

• [Australia] Why housing economists got it wrong on Perth, Melbourne prices – Financial Review
• [Australia] There’s an easy solution to housing affordability. But voters hate it – The Sydney Morning Herald
• [Australia] Middle-income Australians experiencing rental stress with a third of pay spent on housing, report shows. Rent has increased by 36% nationally since Covid, CoreLogic finds, which equates to an extra $171 a week on average – The Guardian

On other countries:  

• [Monaco] Monaco’s Residential Property Market Analysis 2024 – Global Property Guide
• [Netherlands] The Netherland’s Residential Property Market Analysis 2025 – Global Property Guide
• [Peru] Peru’s Residential Property Market Analysis 2025 – Global Property Guide
• [Serbia] Serbia’s Residential Property Market Analysis 2025 – Global Property Guide
• [Spain] Spain to Try to Limit Real Estate Purchases by Non-EU Residents – Bloomberg
• [Spain] Spain plans 100% tax for homes bought by non-EU residents – BBC and Bloomberg
• [Spain] El apetito de los extranjeros por comprar una vivienda en España tras la pandemia. La demanda extranjera es un pilar fundamental para explicar la fortaleza de la demanda de vivienda en el ciclo expansivo actual.– CaixaBank
• [Spain] Spain Property Firms Slam Sanchez Bid to Slug Foreigners on Tax. Plan to tax overseas home purchases seen as grandstanding. Spanish premier faces pressure to act following protests – Bloomberg
• [United Arab Emirates] Dubai’s World Beating Property Rally Shows Signs of Strain. New residents pushed property prices 20% higher in 2024. Rise in home prices is expected to slow in the coming year – Bloomberg
• [United Arab Emirates] UAE’s Residential Property Market Analysis 2025 – Global Property Guide
• [United Kingdom] The decline in remote working hits Britain’s housing market. A return to the office means a return to town – The Economist

From a paper by Monika Junicke, Jakub Mateju, Haroon Mumtaz, and Angeliki Theophilopoulou:

“This paper uses administrative labour market data from Czechia to investigate the heterogeneous effects of technology shocks. Using a FAVAR, the shock is identified using medium run restrictions `a la Uhlig (2004b). Workers on low wages reduce their hours in response to the shock, while the shock has a positive effect on hours for workers with wages at and above the median. Analysis of industrial and demographic groups indicates that the latter group is likely to consist of males, to be educated or to work in services.”

From The News:

“The distinction between market-friendly and business-friendly economic policies is critical in shaping economic growth and inclusiveness. Our government must recognise this difference to ensure that policies benefit not just a select group of businesses but society at large.

Planners must understand the nuances between these policy approaches. Market-friendly policies focus on creating competitive markets with minimal government intervention, prioritising efficiency and resource allocation driven by market forces. However, this approach carries risks of concentrating benefits among established players, potentially fostering monopolies or oligopolies.

In contrast, business-friendly policies aim to support businesses of all sizes, including small and medium enterprises (SMEs) and startups. These policies encourage entrepreneurship and innovation while fostering a level playing field through regulations and incentives. The ultimate goal is broad-based economic growth that benefits all segments of society.

Pakistan’s existing economic policies pose significant challenges. These often favour large corporations or well-connected businesses, sidelining SMEs and participants in the informal sector. Regulatory inefficiencies stemming from governance flaws, inconsistent enforcement and lack of transparency create uncertainty that deters smaller businesses. Access to capital remains a critical issue for SMEs. High credit costs and limited financial access hinder inclusive growth. Furthermore, weak infrastructure, including inadequate transportation, energy and digital access, disproportionately affects smaller enterprises.”

Continue reading here.

From a paper by Washingtone Onyango, Socrates Majune, and Patricia Naluwooza:

“This study analyzes the effect of China’s import dominance on Africa’s structural transformation, measured through the Shapley decomposition approach. A pooled mean group Autoregressive Distributed Lag (PMG-ARDL) model is analyzed using panel data from 1995–2018 for 21 countries. We find that Chinese imports of goods and services, like those from the rest of the world, increase Africa’s structural transformation in the long-run. However, the magnitude of the coefficient for China is larger than that of the rest of the world for both goods and services (total). The Chinese impact on Africa’s structural transformation is mainly through capital goods and other commercial services (such as ICT, financial, and construction), whose coefficients are larger than those of the rest of the world. Imposing barriers on Chinese imports is not a viable option for African countries. Instead, they should pursue policies that enrich the manufacturing sector, including adopting an Africa-wide trade agreement.”

From a paper by Yongjian Lyu, Heling Yi, Mo Yang, Yihan Zou, Ding Li, Zhilong Qin:

“Financial uncertainty shocks are emerging as potential drivers for the spillovers of risk originating from the oil market into the stock market, with the increasing financialization of the oil market. This paper explores this phenomenon and provides compelling findings. First, the oil market generates substantial risk spillovers to the stock market, reaching a peak amid the COVID-19 crisis. Second, according to the backtesting results, the ΔCoVaR values derived from the Student-t Copula model reflect the true level of such risk spillovers. Third, shocks to financial uncertainty increase systemic risk by causing risk to spill over from the oil to the stock market, with larger spillovers occurring during periods of increased economic vulnerability. Finally, financial uncertainty shocks are the fundamental drivers of variance changes in risk spillovers, making a greater contribution than macroeconomic uncertainty shocks, according to the time-varying forecast error variance decomposition.”