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Fluktuationen des Wohnimmobilienmarktes

(by Sven Rady, with Volker Rußig)


Housing Finance 46, 2000, pp. 26-31

This paper gives an overview of the main findings in the research report The Rise and Fall of Residential Transactions in England and Wales that we wrote for the London-based Council of Mortgage Lenders in 2000.


Starting from the observation that

  • the number of transactions in the UK housing market showed unprecedented growth during the boom of 1983-88, contracted sharply during the subsequent bust, and then recovered to pre-boom levels,

we argue that

  • strong income growth and the demographic impact of the coming of age of baby boomers amplified the deviation of the number of transactions from trend but were not its main causes;
  • the behaviour of transactions in the late 1980s is best understood as an exceptional period of adjustment to a one-off event: the liberalisation of credit markets;
  • the large increase in market activity during the boom of the late 1980s contributed to its own subsequent slump, again amplified by a price drop due to a general recession;
  • current transaction levels, low as they may appear compared to the late 1980s, have simply returned to their long-term trend.
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