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House Price Convergence on the Primary and Secondary Markets: Evidence from Polish Provincial Capitals

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  • Tomal Mateusz

    (Department of Economics for Real Estate and Investment Process, Cracow University of Economics)

Abstract

The aim of this study is to identify whether there is a common house price trend across provincial capitals in Poland. The log t regression is the main method of analysis. Additionally, traditional convergence tests based on the concepts of β- and σ-convergence are used. The obtained results indicate that the cities do not share a common price in the long-run. There are, however, convergence clubs on both primary and secondary markets. In each club, house prices across cities tend to converge to their own steady state. Moreover, research on the driving forces of convergence reports that factors affecting housing prices differ among the clubs. Therefore, policymakers should adjust housing policies in accordance with the characteristics of a given club. In turn, the σ-convergence model demonstrated a very interesting finding, namely, a U-shape pattern of convergence, both on the primary and secondary markets. This pattern is strictly correlated with the level of prices on the markets.

Suggested Citation

  • Tomal Mateusz, 2019. "House Price Convergence on the Primary and Secondary Markets: Evidence from Polish Provincial Capitals," Real Estate Management and Valuation, Sciendo, vol. 27(4), pages 62-73, December.
    • Handle: RePEc:vrs:remava:v:27:y:2019:i:4:p:62-73:n:6
    DOI: 10.2478/remav-2019-0036
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    More about this item

    Keywords

    log t regression; the housing market in Poland; σ-convergence; β-convergence; house price convergence;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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