This paper examines whether it costs more to own a home or to rent. We argue this is a useful criterion for assessing housing overvaluation. We use a new Australian dataset, which includes prices and rents for matched properties, letting us value housing in levels. We find that if real house...

This paper explores the positive relationship betwen home prices and household spending by following a panel of Australian households over the period 2003 to 2010. There are three hypotheses put forth in the literature to explain this relationship: (1) increases in home prices raise spending via...