Economic policy uncertainty and housing prices: evidence from Northern and Southern Europe

Purpose This study aims to examine the influence of economic policy uncertainty (EPU) on residential property prices across 10 distinct nations in Europe, specifically in Northern and Southern regions. Design/methodology/approach The autoregressive distributed lag bounded cointegration test is used to carry out the empirical analysis. Findings The findings reveal that there is a stable long-term cointegration between house prices and their determining factors, including EPU, in the 10 nations. The outcomes further indicate that EPU has negative long- and short-term effects on house prices, apart from Spain, where uncertainty has a significant positive effect. Originality/value The sample period of nearly 40 years applied in this paper includes several business cycles, as well as the concluded global financial crisis, the Brexit process and the COVID-19 pandemic. These three important events potentially increased economic uncertainty across Southern and Northern Europe and the globe, thus making this study even more timely and vital.