What do rents tell us about house prices?

Bob Hargreaves
2008 International Journal of Housing Markets and Analysis  
Since 2000 there an unprecedented increase in house prices in a number of western countries, including New Zealand. House prices have risen much more rapidly than rents. This has resulted in questions being raised about the traditional relationship between residential rents and values. The objective of this paper is to determine if changes in private sector residential rents can be used to forecast changes in New Zealand house prices. The hypothesis being that there is a strong linkage between
more » ... ng linkage between income and value in both the share markets and commercial property markets and the same effect is likely to be true for housing.
doi:10.1108/17538270810861120 fatcat:oavuv7sl7jbonkwlmwveuiij6a