![]() In another study performed by Żelazowski ( 2018) the price-to-income ratio in Polish provincial cities was under investigation between 20. The results of this research showed that in 2007–2010 there was a price bubble in the housing market in the analysed city. Footnote 2 One such study was carried out by Brzezicka ( 2016), which examined the prices of flats in the city of Olsztyn and to what extent they are correlated with variables representing speculative behaviour. Footnote 1 However, scientific research to date has not provided an answer to this question, which is the result of a very small number of analyses of this type in the context of the Polish housing market. It should therefore be asked whether this sustained and rapid growth is speculative or whether it is driven by housing market fundamentals, i.e., factors such as income, population growth or interest rates, changes which affect housing supply and demand and consequently the price level (Kholodilin et al., 2018 Maynou et al., 2021). In recent years, also in Poland, experts and scientists have increasingly often analysed the dynamic growth of flat prices in the housing market, which both in the primary and secondary markets has averaged 50% over the last 14 years in real values (National Bank of Poland, 2020). Inaccurate detection of speculative behaviour in this market makes it impossible to take countermeasures what can lead in convection to the collapse of entire economies, and also has very negative consequences for the financial stability of households. The 2007–2008 financial crisis has shown how important the issues of identifying price bubbles in the housing market are. The real estate price bubble can be defined as an abnormal and self-sustaining price growth (Flood & Hodrick, 1990), unjustified by fundamental factors (Stiglitz, 1990), but rather due to misconceptions of investors expecting further property price increases (Case & Shiller, 2003). Finally, this analysis indicated future research directions and study implications for Polish policy-makers, housing investors, and households. However, more or less since the beginning of 2013, the surveyed markets have seen an increasing level of the non-fundamental component of the index under study, and its particularly explosive movements are visible in the first quarters of 2014. ![]() ![]() The results of the study showed that, in general, over 2011, actual log price-to-rent ratios in the analysed cities were below their fundamental values, i.e., a negative price bubble existed. The latter was then examined using the Phillips, Shi, and Yu procedure to detect explosive and downward movements. In order to avoid incorrect conclusions, the log price-to-rent ratio using the instrumental variable estimation and ordinary least squares methods was decomposed into two components: fundamental and non-fundamental. ![]() To accomplish this goal, the log price-to-rent ratios in Polish provincial cities were analysed. This article aims to check whether there has been a price bubble in the Polish major housing markets in recent years. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |