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Rovnovážnost cen nemovitostí v České republice
[Equilibrium Development of Housing Prices in the Czech Republic]

Author

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  • Michal Hlaváček
  • Luboš Komárek

Abstract

This article, based on an empirical analysis, discusses factors affecting property prices and tries to identify periods of property price overvaluation in the Czech Republic. To achieve this, the article uses both relatively simple approach using ratios related to the house prices (e.g. price-to-rent or price-to-income indicators) as well as international comparison and more advanced econometrical approach. Within this econometrical approach we apply both time series analysis for the Czech Republic as a whole and panel regression for the Czech regions. This analysis identifies overvalued property prices in 2002-2003 and 2007-2008. In 2007-2008, however, the rise in property prices was largely explainable by fundamentals, meaning that the price overvaluation in this period was considerably smaller than that in the first one. From the regional perspective, there is a higher degree of overvaluation in regions with higher property prices. The exception is Prague, which seems to be a "specific" region - partly due to the properties of the estimation technique.

Suggested Citation

  • Michal Hlaváček & Luboš Komárek, 2010. "Rovnovážnost cen nemovitostí v České republice [Equilibrium Development of Housing Prices in the Czech Republic]," Politická ekonomie, Prague University of Economics and Business, vol. 2010(3), pages 326-342.
    • Handle: RePEc:prg:jnlpol:v:2010:y:2010:i:3:id:733:p:326-342
    DOI: 10.18267/j.polek.733
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    References listed on IDEAS

    as
    1. Jan Frait & Luboš Komárek, 2007. "Monetary Policy and Asset Prices: What Role for Central Banks in New EU Member States?," Prague Economic Papers, Prague University of Economics and Business, vol. 2007(1), pages 3-23.
    2. 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.
    3. Philip Lowe & Claudio Borio, 2002. "Asset prices, financial and monetary stability: exploring the nexus," BIS Working Papers 114, Bank for International Settlements.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Michal Hlaváček & Ondřej Novotný & Marek Rusnák, 2016. "Analýza cen komerčních nemovitostí v zemích střední Evropy [Analysis of the Commercial Property Prices in the Central European Countries]," Politická ekonomie, Prague University of Economics and Business, vol. 2016(1), pages 3-18.
    2. Hana Hejlová & Michal Hlaváček & Luboš Komárek, 2017. "A Comprehensive Method for House Price Sustainability Assessment in the Czech Republic," Prague Economic Papers, Prague University of Economics and Business, vol. 2017(3), pages 269-285.
    3. Hana Hejlová & Michal Hlaváček & Luboš Komárek, . "A Comprehensive Method for House Price Sustainability Assessment in the Czech Republic," Prague Economic Papers, University of Economics, Prague, vol. 0, pages 1-17.

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    More about this item

    Keywords

    Czech Republic; panel data; housing prices; misalignment;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • 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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