Development of real-estate prices in the euro area: present conditions and macroeconomic consequences

Both theoretical considerations as well as current developments show that residential real-estate markets have a non-negligible effect on economic activity, price levels and financial market stability. There is both an impact on macroeconomic demand and on the borrowing decisions of private households. Horst Gischer and Mirko Weiß, University of Magdeburg, examine the macroeconomic impact of real-estate price developments in the euro area.