Recent episodes of housing bubbles, which occurred in several economies after the burst of the United States housing market, suggest studying the evolution of housing prices from a global perspective. We utilise a theoretical model for the purposes of this contribution, which identifies the main drivers of housing price appreciation, as for example, income, residential investment, financial elements, fiscal policy and demographics. In a second stage of our analysis, we test our theoretical hypothesis by means of a sample of 18 OECD countries from 1970 to 2011. We employ the vector error correction econometric technique in terms of our empirical analysis, which permits us to model the long-run equilibrium relationship and the short-run dynamics, which also helps to account for endogeneity and reverse causality problems.This is the accepted manuscript. The final version is available from Taylor & Francis at http://www.tandfonline.com/doi/full/10.1080/02692171.2013.828683#.VFyu-oXziE
