Real estate soars and financial crises: recent stories

Hanwool Jang, Yena Song, Sungbin Sohn*, Kwangwon Ahn*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

17 Citations (Scopus)
30 Downloads (Pure)


This paper studies the contribution of real estate bubble to a financial crisis. First, we document symptoms of a real estate bubble along with a slowdown of the real economy and find indicators of an imminent crash of the stock market, triggering a sense of déjà vu from the 2008 crisis. However, we show that the relationship between real estate and financial markets has changed since the crisis. The empirical analyses provide evidence that the monetary policy has recovered its control over mortgage rates, which had been lost prior to the global financial crisis, and that the real estate market does not have a Granger causality relationship with the stock market any more. Findings suggest that an imminent financial market crash is not likely to be catalyzed by a real estate bubble.
Original languageEnglish
Article number4559
Number of pages12
Issue number12
Publication statusPublished - 3 Dec 2018


  • financial crash
  • real estate bubble
  • stock market
  • Real estate bubble
  • Financial crash
  • Stock market

ASJC Scopus subject areas

  • Environmental Science (miscellaneous)
  • Geography, Planning and Development
  • Energy Engineering and Power Technology
  • Management, Monitoring, Policy and Law
  • Renewable Energy, Sustainability and the Environment


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