House Price Dynamics : The French Case

Archive ouverte : Communication dans un congrès

Datsenko, Radmila

Edité par HAL CCSD

International audience. During the early 2000's, house prices doubled in most of developed countries including France. Several studies analyse this evolution from a macroeconomic point of view using the market fundamentals to explain the real estate prices boom. However, this approach seems to be insufficient since it gives no explanation on the evolution inside the market, nor on the agents' behaviour. This paper focuses on the micro-level changes of the housing market in order to detect the dimensions of residential property which have absorbed the price increase. For this purpose, we make use of the two-staged hedonic methodology which allows to explore the effects of both structural and locational attributes of dwellings and social and economic characteristics of purchasers. Combining data from several sources, we build a comprehensive database on transaction prices for the department of Oise (more than 33000 observations over the period 2000-2008). Our results reveal that the willingness to pay for some environmental attributes have increased over the period, nevertheless this appreciation don't absorb the entire house prices' boom as it commonly argued. Otherwise, the results of the second stage show that the role of environmental amenities grew between 2000 and 2006. However, some of these attributes involve important depreciation of dwellings so that we cannot agree with the hypothesis of over-valuation of land and environmental features.

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