Covering reciprocal and mutually reinforcing relations between business, housing and credit cycles, the book assesses Spanish housing market in wider circumstances. The dynamic path of house prices is explained based on the difference in how structural components of the demand react on changes in financial and macroeconomic environment. As a result of controlling for match of demand and supply in both timely and spatial manner, expectations are included to explain the subsequent volume of housing traded on the market and microeconomic decision making model is derived to assess the role favourable incentives might have played in fuelling the house price cycle. Next, existence of reciprocal relations suggested by theory is confirmed empirically only during the house price upturn and asymmetry in speed of downward adjustment is found in the opposite case, pointing out at redistribution effect abrupt changes in house prices have in time. The results derived finally allow to assess possibilities of better employment of anti cyclical regulatory tools towards eliminating mutually enforcing powers between the cycles and avoiding both financial and macroeconomic imbalances in future.