Learning from Spanish Real estate crisis

Abstract

For our CCS project titled “Learning from the Spanish Real Estate Crisis” we began by doing a literature review on the factors which help in explaining the housing prices. We studied forces which impact the demand and supply of housing in a country. After studying these factors, we analyzed if these factors help us in explaining the Spanish housing market. We then went on to build a textbook model for the housing prices in an economy. We did an Ordinary Least Square regression using the above model and the above-identified factors as our independent variables and saw that most of the factors were significant in explaining the housing price index. We further went on to study these factors in detail and if they actually can be leading or lagging indicators of a housing price bubble.