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Housing price bubble analysis - case of the Czech republic

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  • Jan Čadil

Abstract

The paper deals with the hypothesis of housing price bubble in the Czech economy. This topic is very popular among economists worldwide now, especially because of the U.S. housing crisis and subsequent collapses on financial markets. However, surprisingly there are not many analyses dealing with the Czech housing market (besides e.g. very brief Financial Stability Report published by the Czech National Bank in 2008) and with the possible housing bubble burst. The first standard bubble indicators like P/I ratio are used to identify the bubble possibility on the Czech housing market. As the second step a regression analysis (VAR model) is being used for deeper analysis of the situation. The whole analysis is complicated by a lack of relevant data and quite short-time series.

Suggested Citation

  • Jan Čadil, 2009. "Housing price bubble analysis - case of the Czech republic," Prague Economic Papers, Prague University of Economics and Business, vol. 2009(1), pages 38-47.
    • Handle: RePEc:prg:jnlpep:v:2009:y:2009:i:1:id:340:p:38-47
    DOI: 10.18267/j.pep.340
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    References listed on IDEAS

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    1. Dimitri B. Papadimitriou & Edward Chilcote & Gennaro Zezza, 2006. "Are Housing Prices, Household Debt, and Growth Sustainable?," Economics Strategic Analysis Archive sa_jan_06, Levy Economics Institute.
    2. Heij, Christiaan & de Boer, Paul & Franses, Philip Hans & Kloek, Teun & van Dijk, Herman K., 2004. "Econometric Methods with Applications in Business and Economics," OUP Catalogue, Oxford University Press, number 9780199268016.
    3. Karl E. Case & Robert J. Shiller, 2003. "Is There a Bubble in the Housing Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 299-362.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Michal Hlavacek & Lubos Komarek, 2009. "Housing Price Bubbles and their Determinants in the Czech Republic and its Regions," Working Papers 2009/12, Czech National Bank.
    2. Roman Sustek, 2022. "A Back-of-the-Envelope Analysis of House Prices: Czech Republic, 2013-2021," CERGE-EI Working Papers wp737, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    3. Vlastimil Reichel & Petr Zimčík, 2018. "Determinants of Real Estate Prices in the Statutory City of Brno," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 66(4), pages 991-999.
    4. Roman Sustek, 2021. "A back-of-the-envelope analysis of house prices: Czech Republic, 2013-2021," Discussion Papers 2120, Centre for Macroeconomics (CFM).
    5. Širůček, Martin, 2015. "Kauzalní vztah peněžní nabídky a amerického akciového trhu [Money supply and US stock market causality]," MPRA Paper 66357, University Library of Munich, Germany, revised 30 Aug 2015.

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    More about this item

    Keywords

    housing price bubble; housing market; P/I ratio; speculation demand; market forward buying;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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