Determinants of Demand in the Polish Real Property Market in the Years 1995-2008

In times of growing insecurity in world economy, it is vital to search for regularity and stability. Attempts to find reliable aspects, or at least elements which are acceptably dependable in the ever less and less foreseeable reality, offer the chance to take more correct economic decisions. The paper will present research findings from a study of the relationships between the standing of the Polish economy (measured by the dynamics of GDP, unemployment rate, levels of the main indices on the Warsaw stock exchange, and interest rates), demand in the real property market, and real property prices. Conclusions will be drawn as to which of the factors analyzed is most closely related with the real property market. Relationships between the measures presented will be studied taking into consideration economic cycles in the real property market. The research period of 1995-2008 will be divided into phases of increasing and decreasing real property prices, in order to analyze regularities or lacks thereof in the relationships between the studied quantities. The research will elucidate whether economic cycles alter regularities in the Polish economy. The fourteen-years-long research period includes two phases of price increases and two phases of decreases. Moreover, the time lag between the variables studied will be considered. This will enable identification of how fast the real property market reacts to changes in the entire economy. The phases of increases and decreases towards the end of the 20th century and at the beginning of the 21st century in Poland were determined by different factors. Recent decreases related to the worldwide economic crisis are largely unprecedented. The proposed research will clarify whether the real property market in Poland withstands abrupt changes, or whether the previously observed regularities have vanished.