Is There a Real Estate Bubble in the Czech Republic?
Real estate prices more than doubled in many countries of Central and Eastern Europe from 2003 to 2008. In this paper, I provide one of the first assessments of whether housing prices in this region correspond to rents, i.e. to cash-flows related to an apartment purchase. State-of-the-art panel data stationarity and Granger causality techniques are employed to test the implications of the standard present value model using regional data from the Czech Republic. Apartment prices are only slightly overvalued. In addition, changes in prices are helpful in predicting changes in rents and vice versa.
Volume (Year): 61 (2011)
Issue (Month): 1 (January)
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- Balázs Egert & Dubravko Mihaljek, 2007.
"Determinants of House Prices in Central and Eastern Europe,"
CESifo Working Paper Series
2152, CESifo Group Munich.
- Bal�zs �gert & Dubravko Mihaljek, 2007. "Determinants of House Prices in Central and Eastern Europe," Comparative Economic Studies, Palgrave Macmillan, vol. 49(3), pages 367-388, September.
- Balazs Egert & Dubravko Mihaljek, 2007. "Determinants of House Prices in Central and Eastern Europe," William Davidson Institute Working Papers Series wp894, William Davidson Institute at the University of Michigan.
- Balázs Égert & Dubravko Mihaljek, 2007. "Determinants of house prices in central and eastern Europe," BIS Working Papers 236, Bank for International Settlements.
- Balazs Egert & Dubravko Mihaljek, 2008. "Determinants of House Prices in Central and Eastern Europe," Working Papers 2008/1, Czech National Bank, Research Department.
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"Testing for unit roots in heterogeneous panels,"
Journal of Econometrics,
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- Tom Doan, . "IPSHIN: RATS procedure to implement Im, Pesaran and Shin panel unit root test," Statistical Software Components RTS00098, Boston College Department of Economics.
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