Housing prices and external shocks’ impact on South Africa and the Czech Republic’s housing prices: a Vector Error Correction model and impulse response functions approach

Partly because of the expansionary monetary policies in many countries in recent decades, housing prices in many mega cities are very high and have been on a rising trend for years (although there have been times when prices have fallen). In many countries housing is considered to be the most important investment category in households’ investment portfolios (Hochguerte 2001, Li 2015). In fact, many households’ wealth are held in the form of housing (Hochguerte 2001) instead of the traditional gold and silver.