How sensitive are property prices to the number of dwellings?

Our answer to this question can be found in the paper « The Elasticity of Home Prices with Respect to their Number » (March 2015, in French). Based on the literature and on analyses we have performed, the elasticity of the price of dwellings with respect to the number of dwellings seems to be around -1 or -2. Thus, if 350 000 additional dwellings (say around 1% of the 35 million French dwellings) were built, home prices would be lower by around 1% or 2% "everything else being equal".

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