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The Impact Of Selected Macroeconomic Variables On House Prices In Croatia

Author

Listed:
  • Manuel Benazic

    (Juraj Dobrila University of Pula, Faculty of Economics and Tourism "Dr. Mijo Mirkovic")

  • Dean Uckar

    (Juraj Dobrila University of Pula, Faculty of Economics and Tourism "Dr. Mijo Mirkovic")

Abstract

Recognizing the macroeconomic determinants that have a statistically significant influence on the formation of house prices is in the interest of the general public due to its informative effect on various interest groups involved in housing construction. Thus, real estate buyers, investors, as well as local government and self-government units should be interested in this information because monitoring of standard macroeconomic variables can provide conclusions about the possible development of residential property prices. Previously conducted research can be classified into four distinctive categories depending on what they take as determining variables: microelements specific to individual micro location, the impact of the COVID-19 pandemic, standard macroeconomic variables, or tourism development. The aim of this study is to analyze the influence of selected macroeconomic variables on residential property prices in Croatia. This study employs Autometrics, i.e. an automatic computer implementation of general-to-specific VAR (vector autoregressive) modelling framework and quarterly data on real GDP, domestic credit, consumer prices, interest rate, tourist arrivals and house prices in the period from March 2005 to September 2022. Performed Granger causality tests and impulse response functions analysis indicate that an increase in real GDP, domestic credit and tourist arrivals increases house prices in Croatia while an increase in consumer prices and interest rate reduces them.

Suggested Citation

  • Manuel Benazic & Dean Uckar, 2024. "The Impact Of Selected Macroeconomic Variables On House Prices In Croatia," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 33(1), pages 65-88, june.
    • Handle: RePEc:avo:emipdu:v:33:y:2024:i:1:p:65-88
    DOI: 10.17818/EMIP/2024/1.4
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    References listed on IDEAS

    as
    1. Kevin D. Hoover & Stephen J. Perez, 1999. "Data mining reconsidered: encompassing and the general-to-specific approach to specification search," Econometrics Journal, Royal Economic Society, vol. 2(2), pages 167-191.
    2. Časni Anita Čeh & Filić Josipa, 2022. "Tourism housing price nexus," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 8(2), pages 53-65, December.
    3. Gregory D Sutton, 2002. "Explaining changes in house prices," BIS Quarterly Review, Bank for International Settlements, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Autometrics; Croatia; general-to-specific modelling; house prices; VAR model;
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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