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Relationship Between the Housing Market and Macroeconomic Factors in Bulgaria and the European Union

Author

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  • Blagovest Iliev

    (University of Economics – Varna)

Abstract

The paper investigates the correlation between house prices and main macroeconomic factors for the markets in Bulgaria and the EU for the period from 2016 to the first half of 2023. The analysis aims to enrich existing research on the Bulgarian housing market which is still developing and compare the findings to the EU market as a benchmark for the performance of a developed residential market. Residential property prices in Bulgaria experience the highest correlation with inflation, unemployment and GDP while they are least related to changes in the average mortgage interest rate. In contrast, the European housing market overall is most strongly correlated to changes in the average mortgage interest rate, followed by GDP and unemployment while it is least related to inflation. Results are consistent with existing studies which indicate that different macroeconomic factors impact the housing markets because of local economy specifics. Comparison to prior analysis of the Bulgarian market suggests that the relationship between housing prices and macroeconomic factors also varies during different periods and economic cycles.

Suggested Citation

  • Blagovest Iliev, 2024. "Relationship Between the Housing Market and Macroeconomic Factors in Bulgaria and the European Union," Stroitelno predpriemachestvo i nedvizhima sobstvenost = Construction Entrepreneurship and Real Property, University of Economics Varna, issue 1, pages 121-132.
    • Handle: RePEc:vrn:sjcerp:y:2024:i:1:p:121-132
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    File URL: https://cerp.ue-varna.bg/index.php/ojs1/article/view/25/10
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    More about this item

    Keywords

    Bulgaria; European Union; Housing market; Macroeconomic factors;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects

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