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Regional Determinants of Housing Prices in the Czech Republic

Author

Listed:
  • Roman Kalabiska

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University Opletalova 26, 110 00, Prague, Czech Republic)

  • Michal Hlavacek

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University Opletalova 26, 110 00, Prague, Czech Republic
    Office of the Czech Fiscal Council, Holeckova 103/31, 15000 Prague 5, Czech Republic)

Abstract

This paper examines the behaviour of housing prices and identifies their determinants across Czech regions from 2000 to 2017. The effect of a wide range of variables on apartment prices is analyzed on quarterly data for all regions of the Czech Republic using panel dynamic OLS estimator. Furthermore, an error correction model is employed to verify the existence of long-term equilibrium of apartment prices and the speed of price adjustment in the short run. The regression reveales that apartment prices are driven mainly by wages, unemployment rate and building plot prices. In order to check robustness of selected model, several regions with unique characteristics are excluded from the sample and analyzed separately. Our results show that building plot prices have an unexpected negative effect in low-income regions and labour force factors are less important in Prague, caused by a number of unique features of the capital city.

Suggested Citation

  • Roman Kalabiska & Michal Hlavacek, 2020. "Regional Determinants of Housing Prices in the Czech Republic," Working Papers IES 2020/9, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Apr 2020.
    • Handle: RePEc:fau:wpaper:wp2020_09
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    File URL: https://ies.fsv.cuni.cz/en/veda-vyzkum/working-papers/6232
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    Keywords

    Apartment prices; regional analysis; residential real estate; panel regression;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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