The Housing Markets in Spain and Portugal: Evidence of Persistence

This paper analyses house prices in Spain and Portugal over the last twenty years. In recent decades, housing prices have increased dramatically in the two countries; However, in 2007 the US subprime mortgage crisis broke out, which had worldwide influences, including Spain and Portugal. The purpose of this research is to study the time series persistence and the potential presence of breaks in these two countries. From this viewpoint, it is interesting to see how housing policy makers design reforms to adjust the real estate market, an issue of real concern for both citizens and institutions.