House price fluctuations take centre stage in recent macroeconomic
debates, but little is known about their long-run evolution. This column
presents new house price indices for 14 advanced economies since 1870.
Real house prices display a pronounced hockey-stick pattern over the
past 140 years. They stayed constant from the 19th to the mid-20th
century, but rose strongly in the second half of the 20th century.
Sharply increasing land prices, not construction costs, were the key
driver of this trend.
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