Club convergence in European housing prices: The role of macroeconomic and housing market fundamentals

This study aims to determine whether there is convergence in house prices across a sample of European economies, including members and non-members the Eurozone. Overall literature has found no evidence Europe. Using data from twelve countries over time period 2004Q2 2016Q3 we test for null hypothesis against an alternative divergence (or club convergence) apply Bayesian dynamic panel model price dynamics drivers. The results suggest presence five housing market clubs Europe but Eurozone club. In addition find that main determinants real are mainly fiscal factors unemployment. Given significance markets economy stability financial system, may wish consider measures facilitate members’ markets.