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The Ups and Downs of European Real Estate Markets’ Integration

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  • Jean-François Carpantier

    (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon)

  • Christelle Sapata

Abstract

National real estate markets are usually considered to be segmented from each other. The benefits of international diversification in real estate markets have been shown to be greater than those in equity or bond markets. New developments in Europe (the single market, monetary union and post-crisis coordination of macroprudential policies) are expected to increase integration and reduce these benefits. We study the time-varying degree of integration of European real estate markets over the period 1971-2017 by estimating the explanatory power of a multi-factor linear model. We find that the integration has been relatively stable over time, with a temporary rise during the 2008 financial crisis. We also note that the integration dynamics within Europe have not become stronger than with non-European countries. The data do not detect stable regional clusters of integration. The international diversification of real estate investments still matters.

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  • Jean-François Carpantier & Christelle Sapata, 2019. "The Ups and Downs of European Real Estate Markets’ Integration," Working Papers hal-02171480, HAL.
    • Handle: RePEc:hal:wpaper:hal-02171480
    Note: View the original document on HAL open archive server: https://hal.science/hal-02171480v3
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