Housing Prices, Wars, and Epidemics over Six Centuries

Research

47 Pages

Swiss Finance Institute examines six centuries of Stockholm housing data to test how wars, bubbles, and epidemics affect house prices over time. The paper finds 14 bubble episodes with an average duration of 4.2 years and argues wars and bubble bursts matter far more for long run housing damage than epidemics do.

Key Takeaways

Bubbles Lasted Years: The authors identify 14 bubble episodes, with each lasting an average of 4.2 years, showing that housing excesses were recurring rather than isolated events.
Wars Hit Harder: House prices generally fell 11% to 17% after the onset of war, with cumulative declines depending on the type of conflict studied.
Busts Were Deeper: Bubble bursts cut house prices by 16% initially, with the cumulative decline reaching 27% over 5 years.
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