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Determinants of house prices in central and eastern Europe

Author

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  • Balázs Égert
  • Dubravko Mihaljek

Abstract

This paper studies the determinants of house prices in eight transition economies of central and eastern Europe (CEE) and 19 OECD countries. The main question addressed is whether the conventional fundamental determinants of house prices, such as GDP per capita, real interest rates, housing credit and demographic factors, have driven observed house prices in CEE. We show that house prices in CEE are determined to a large extent by the underlying conventional fundamentals and some transition-specific factors, in particular institutional development of housing markets and housing finance and quality effects.

Suggested Citation

  • Balázs Égert & Dubravko Mihaljek, 2007. "Determinants of house prices in central and eastern Europe," BIS Working Papers 236, Bank for International Settlements.
    • Handle: RePEc:bis:biswps:236
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    References listed on IDEAS

    as
    1. Jose Palacin & Robert Shelburne, 2005. "The Private Housing Market in Eastern Europe and the CIS," ECE Discussion Papers Series 2005_5, UNECE.
    2. Peter Backé & Balázs Égert, 2006. "Credit Growth in Central and Eastern Europe: New (Over)Shooting Stars?," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 112-139.
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    15. Balázs Égert & Peter Backé & Tina Zumer, 2007. "Private-Sector Credit in Central and Eastern Europe: New (Over)Shooting Stars?," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 49(2), pages 201-231, June.
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    More about this item

    Keywords

    House prices; housing market; transition economies; central and eastern Europe; OECD countries;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E39 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Other
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • 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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