Does total-factor productivity drive housing prices? A growth-accounting exercise for four countries

► We compare housing and construction prices in the US, the UK, Germany, and Spain. ► The two prices follow a similar pattern before 1997 and diverge afterwards. ► We also measure the contribution of relative total-factor productivity (TFP) on construction prices. ► Relative TFP explains construction prices in the US and Germany. ► Wages and capital returns drive construction prices in the UK and in Spain.