Conference Agenda

This paper reconstructs house price and return dynamics in Germany over the very long-run, from the 15th century to the present, taking advantage of recent leaps in primary data. Contrary to existing consensus, I find that the ongoing contemporary "housing boom" in fact can be traced back four centuries ago, rather than originating in the mid-20th century. Similarly, the 1998-2024 era that saw house price growth outstrip income growth appears to be consistent with the historical norm, rather than an outlier driven by "bubble conditions". Housing excess returns appear to be driven by credit and demographic factors over time, and characterized by a "U-shape" trajectory since the Renaissance. A major inflection point in housing markets appears to have taken place around the year 1650, when mortgage rates began their secular decline: indeed, with idiosyncratic risk in housing being remarkably stable since this point in time, the data presented adds to evidence that it was this particular period that first witnessed the emergence of sovereign debt as the "safe asset", which around then began its divergence from the rest of the asset universe.