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Measuring fundamental housing prices in the Baltic States: empirical approach

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  • Darius Kulikauskas

Abstract

This paper develops a comprehensive framework for assessing housing price misalignments from the fundamental prices in the Baltic States. For this purpose several statistical indicators (price-to-rent ratio, price-to-income ratio, price deviations from Hodrick-Prescott filtered trend) are used together with econometric models. Such models include reduced form equilibrium price regressions estimated for individual countries and for the panel as well as supply-demand system for each of the Baltic countries. Statistical indicators are employed in combination with the model estimates to arrive to clearer conclusions about residential real estate price misalignments. This paper contributes to the literature by filling the gap of monitoring housing market developments consistently in the Baltics and developing a framework that can potentially be used to monitor price misalignments in the residential real estate markets of other countries.

Suggested Citation

  • Darius Kulikauskas, 2015. "Measuring fundamental housing prices in the Baltic States: empirical approach," ERES eres2015_31, European Real Estate Society (ERES).
  • Handle: RePEc:arz:wpaper:eres2015_31
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    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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