The figure tells a familiar story: property prices rose sharply across the world in the decade before the financial crisis started in 2007. The diversity of the price changes between 1999 and 2007 is staggering, ranging from –6% in Germany to over 160% in Spain, which corresponds to an average annual increase of between –0.85 and 12%.
These large differences between countries in the extent of the price increases are interesting. It is particularly notable that the price increases in the US – 75% in this period or 7% annually – were rather modest from an international perspective. Figure 2 shows credit expansion in the same economies, using data from the IMF.