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Real Estate Market At A Crossroad - Era Of Affordable Housing Is Gone

Author

Listed:
  • Klára ?ermáková

    (Prague University of Economics and Business, dept. of Economics)

  • Eduard Hromada

    (Czech Technical University)

  • Ondrej Bednar

    (Prague University of Economics and Business, dept. of Economics)

  • Tomáš Pavelka

    (Prague University of Economics and Business, Prague University of Economics and Business, Department of Managerial Economics)

Abstract

Within a broad discussion on property price formation and property market specifics this paper aims to investigate the relationship between property price trends and number of transactions occurred on housing market. Specifically, we test if housing transaction volumes and rents are good predictors of housing prices and discuss causalities and differences in this relationship on the sales and rental property markets. We bring evidence from selected European property markets about the relationship between property price trend and number of transactions occurring on this market. We argue that increased number of transactions is predictive of increase in property price, but prices tend to be rigid in the opposite (downward) direction. Thus, cooling down of demand for properties may rather decrease number of transactions than push down property prices. This appealing result may bring light into understanding why property prices appreciate across time and countries.

Suggested Citation

  • Klára ?ermáková & Eduard Hromada & Ondrej Bednar & Tomáš Pavelka, 2023. "Real Estate Market At A Crossroad - Era Of Affordable Housing Is Gone," International Journal of Economic Sciences, European Research Center, vol. 12(1), pages 38-61, May.
    • Handle: RePEc:aop:jijoes:v:12:y:2023:i:1:p:38-61
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    More about this item

    Keywords

    housing market; property price; transactions; rent; housing affordability; market turnover; inflation; mortgage loans;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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