Global Housing Markets 2000-15: A Supply Side View A presentation for IHA 2016 Interim Meeting November 3, 2016 Hites Ahir Research Department, IMF THE VIEWS EXPRESSED IN THIS PRESENTATION ARE THOSE OF THE PRESENTERS AND SHOULD NOT BE ASCRIBED TO THE IMF OR IMF POLICY.

I. Why take a look at housing supply?

House prices are rising in many countries

Housing supply constraints have been reported in several countries In Sweden, differences in housing supply conditions across cities have contributed to divergences in house prices (IMF 2015). In St. Ives—a seaside town in Cornwall, England—80 percent of the residents voted for a neighborhood plan that bans the sale of newly built homes as second homes (Mohdin 2016). In the United States, a limited supply of single-family homes available for purchase will continue to constrain sales growth, and put upward pressure on house prices over the next few years (Rappaport 2016).

Housing supply constraints have been linked with housing affordability issues

Google shows an increase in number of search results for supply and affordability

II. What data is available on housing supply across countries?

Cross-country dataset A dataset on housing construction indicators for 42 countries Source: CEIC, Eurostat, Haver Analytics, Organisation for Economic Co-operation and Development (OECD), and national sources.

Housing construction indicators Housing investment is defined as gross fixed capital formation— housing (28 countries included). Housing completions is defined as number of new residential construction projects that have been completed during a given period (21 countries included). Housing permits is defined as an authorization to start work on a housing project (40 countries included). Housing starts is defined as the number of new residential construction projects that have begun during a given period (22 countries included).

List of countries included Australia, Austria, Belgium, Canada, Chile, Colombia, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Netherlands, New Zealand, Norway, Poland, Portugal, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Taiwan, United Kingdom, and United States.

III. What does the dataset show us?

The picture at the aggregate level: 2000-15

The aggregate picture for other indicators

The picture at the disaggregate level Countries can be placed into groups based on similarities in the performance of house prices. Breaking the sample into two time periods, 2007-2012 and 2013- 2015, we can see three distinct patterns that form a basis for placing countries into groups.

Group 1: Gloom and Gloom On average, real house prices declined during both 2007-12 and 2013-15. 13 countries: Belgium, Croatia, Cyprus, Finland, France, Greece, Italy, Macedonia, Netherlands, Poland, Singapore*, Slovenia, and Spain. Note: real house prices in Singapore declined during 2013-15, but not during 2007-12 period.

Group 2: Bust and Boom On average, real house prices declined during 2007-2012, but rebounded during 2013-2015. 12 countries: Czech Republic, Denmark, Estonia, Hungary, Ireland, Latvia, Lithuania, Malta, Portugal, South Africa, United Kingdom, and United States.

Group 3: Boom and Boom On average, real house prices did not experience a decline during either 2007-2012 or 2013-2015. 17 countries: Australia, Austria, Canada, Chile, Colombia, Germany, Hong Kong, Israel, Japan, Korea, Luxembourg, Malaysia, New Zealand, Norway, Slovak Republic, Sweden, and Taiwan.

The picture at the disaggregated level

The disaggregated picture for other indicators

III. Article IV Consultations

2016 Article IV Consultations Completed Not Completed Canada (June) Japan (July) Nigeria (May) Norway (June) Peru (June) South Africa (July) United States (July) Zimbabwe (May) Australia Gambia, The Namibia Tanzania Uganda Zambia

Thank you.