Comparative perspective of the housing market in the Latin American and international context

Abstract

This paper presents a proposal to homogenize housing prices with the purpose of comparing values among countries with different economic development, allowing the identification of the reasons for the widespread increasing prices during the last decade. Several countries were analyzed: fifteen from developed economies (Australia, United States, Japan, and twelve countries of the European Union), and nine Latin American countries. Four kinds of prices related to economic factors were defined, showing that the different payment mechanisms used for purchase may increase or decrease housing nominal prices, according to the environment. In developed countries, the increase in housing prices is mainly caused by interest rates, followed by employment rates and standard of living of its citizens. In Latin America, this increase may be attributed to the economic stability and growth achieved by the region during the last few years, in spite of the poor development of the mortgage market and of the high interest rates.