Residential Property Prices in Central, Eastern and Southeastern European Countries
The large movements in residential property prices in emerging markets observed over the past decade have raised interest in housing market developments. Within a cointegration framework applied to an unbalanced panel, we assess the relationship between residential property price developments, economic fundamentals and transition-specific factors in Central, Eastern and Southeastern European (CESEE) EU countries from 1999 to 2011.2 Our results show that demand-side fundamentals (disposable income, population, interest rates) and transition-specific factors related to housing demand (such as funding through remittances and credit growth) as well as construction costs on the supply side have been particularly important in residential property price movements. Nevertheless, these factors cannot fully explain residential property price movements, i.e. we find evidence that house prices moved above the level indicated by those factors in the years preceding the crisis. The sharp correction of residential property prices that took place following the outbreak of the financial crisis reversed these overshoots and brought house prices back to – and in some countries even below – the level indicated by the explanatory factors. This suggests that residential property prices are likely to rebound somewhat when economic conditions improve.
Volume (Year): (2013)
Issue (Month): 2 ()
|Contact details of provider:|| Postal: P.O. Box 61, A-1011 Vienna, Austria|
Phone: +43/1/404 20 7405
Fax: +43/1/404 20 7499
Web page: http://www.oenb.at
More information through EDIRC
|Order Information:|| Postal: Oesterreichische Nationalbank, Documentation Management and Communications Services, Otto-Wagner Platz 3, A-1090 Vienna, Austria|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul van den Noord, 2005.
"Tax Incentives and House Price Volatility in the Euro Area: Theory and Evidence,"
CEPII research center, issue 101, pages 29-45.
- Paul van den Noord, 2003. "Tax Incentives and House Price Volatility in the Euro Area: Theory and Evidence," OECD Economics Department Working Papers 356, OECD Publishing.
- 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, 2008. "Determinants of House Prices in Central and Eastern Europe," Working Papers 2008/1, Czech National Bank, Research Department.
- 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.
- Konstantin A. Kholodilin & Jan-Oliver Menz & Boriss Siliverstovs, 2007.
"What Drives Housing Prices Down?: Evidence from an International Panel,"
Discussion Papers of DIW Berlin
758, DIW Berlin, German Institute for Economic Research.
- Konstantin A. Kholodilin & Jan-Oliver Menz & Boriss Siliverstovs, 2010. "What Drives Housing Prices Down? Evidence from an International Panel," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 230(1), pages 59-76, February.
- Mitsuhiro Fukao & Masaharu Hanazaki, 1986. "Internationalisation of Financial Markets: Some Implications for Macroeconomic Policy and for the Allocation of Capital," OECD Economics Department Working Papers 37, OECD Publishing.
- Alessio Ciarlone, 2012. "House price cycles in emerging economies," Temi di discussione (Economic working papers) 863, Bank of Italy, Economic Research and International Relations Area.
- Elizabeth Steiner, 2010.
"Estimating a stock-flow model for the Swiss housing market,"
2010-08, Swiss National Bank.
- Elizabeth Steiner, 2010. "Estimating a Stock-Flow Model for the Swiss Housing Market," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 146(III), pages 601-627, September.
- Eloisa T Glindro & Tientip Subhanij & Jessica Szeto & Haibin Zhu, 2008. "Determinants of house prices in nine Asia-Pacific economies," BIS Working Papers 263, Bank for International Settlements.
- Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
- Nathalie Girouard & Mike Kennedy & Paul van den Noord & Christophe André, 2006. "Recent House Price Developments: The Role of Fundamentals," OECD Economics Department Working Papers 475, OECD Publishing.
- Jérôme Vandenbussche & Ursula Vogel & Enrica Detragiache, 2015.
"Macroprudential Policies and Housing Prices: A New Database and Empirical Evidence for Central, Eastern, and Southeastern Europe,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 47(S1), pages 343-377, 03.
- Jerome Vandenbussche & Ursula Vogel & Enrica Detragiache, 2012. "Macroprudential Policies and Housing Price: A New Database and Empirical Evidence for Central, Eastern, and Southeastern Europe," IMF Working Papers 12/303, International Monetary Fund.
- Antje Hildebrandt & Reiner Martin & Katharina Steiner & Karin Wagner, 2012. "Residential Property Markets in CESEE EU Member States," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 8-30.
- Dan Andrews, 2010. "Real House Prices in OECD Countries: The Role of Demand Shocks and Structural and Policy Factors," OECD Economics Department Working Papers 831, OECD Publishing.
- Samya Beidas-Strom & Weicheng Lian & Ashwaq Maseeh, 2009. "The Housing Cycle in Emerging Middle Eastern Economies and its Macroeconomic Policy Implications," IMF Working Papers 09/288, International Monetary Fund.
- Engle, Robert & Granger, Clive, 2015.
"Co-integration and error correction: Representation, estimation, and testing,"
Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
- Luis M. Cubeddu & Camilo Ernesto Tovar Mora & Evridiki Tsounta, 2012. "Latin America: Vulnerabilities Under Construction?," IMF Working Papers 12/193, International Monetary Fund.
- James M. Poterba, 1984. "Tax Subsidies to Owner-Occupied Housing: An Asset-Market Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 99(4), pages 729-752.
When requesting a correction, please mention this item's handle: RePEc:onb:oenbfi:y:2013:i:2:b:1. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Birgit Riedler)
If references are entirely missing, you can add them using this form.