No price like home: global house prices, 1870–2012
Open accessAbstract
How have house prices evolved over the long run? This paper presents annual house prices for 14 advanced economies since 1870. We show that real house prices stayed constant from the nineteenth to the mid-twentieth century, but rose strongly and with substantial cross-country variation in the second half of the twentieth century. Land prices, not replacement costs, are the key to understanding the trajectory of house prices. Rising land prices explain about 80 percent of the global house price boom that has taken place since World War II. Our findings have implications for the evolution of wealth-to-income ratios, the growth effects of agglomeration, and the price elasticity of housing supply. (JEL C43, N10, N90, R31)
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Land rents are exploding alongside a housing affordability crisis in many advanced economy cities.
“Land rents are exploding alongside a housing affordability crisis in many advanced economy cities”
From Mapping modern economic rents: the good, the bad, and the grey areas (2023) · cites this paper as Knoll et al., 2017
Section 5.3 reports a surge in residential land prices that fueled a broad house-price boom, supporting the claim's underlying price trend. The paper does not establish that land rents are exploding or document a housing affordability crisis in many cities; its finding concerns land prices across advanced economies. (LLM, conf=0.88)
Experimental — accuracy not yet measuredHouse prices, largely driven by land values, have risen at a much faster rate than incomes and consumer prices in nearly all advanced economies over the last 40 years.
“But for the last 40 years house prices, largely driven by land values, have risen at a much faster rate than incomes and consumer prices in nearly all advanced economies (Piketty, 2014;Knoll et al., 2017 and see figure 1)”
From Mapping modern economic rents: the good, the bad, and the grey areas (2023) · cites this paper as Knoll et al., 2017
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“A veritable real estate boom is described to have occurred in Florida and Chicago (White, 2009; Galbraith, 1955).”
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- Authors
- Knoll, K., Schularick, M., & Steger, T.
- Affiliations
- University of Bonn (DE)
- Leipzig University (DE)
- ORCID
- Steger, Thomas
- Venue
- American Economic Review
- Publisher
- American Economic Association
- Published
- 2017-02-01
- Volume
- 107
- Issue
- 2
- Pages
- 331-353
- ISSN
- 0002-8282 (ISSN-L)
- OpenAlex
- W3022688173
- Cited by
- 467
- References
- 2
- Citations by year
- 2026: 31 · 2025: 56 · 2024: 40 · 2023: 53 · 2022: 35 · 2021: 57 · 2020: 65 · 2019: 51 · 2018: 41 · 2017: 21 · 2016: 8 · 2015: 5 · 2014: 3
- FWCI
- 87.45
- Type
- journal article
- Language
- en
- Open access
- green
- doi.org
- Locations
- American Economic Review (publishedVersion)
- SSRN Electronic Journal (acceptedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Econstor (Econstor) (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Housing Market and Economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Historical Economic and Social Studies
- Social Sciences › Economics, Econometrics and Finance › Finance › Housing, Finance, and Neoliberalism
- Keywords
- housing prices, land prices, replacement cost, housing supply elasticity, wealth-to-income ratio, agglomeration economies, developed countries, cross-national variation
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