Housing markets in Central and Eastern Europe: is there a bubble in the Czech Republic?

0330764 - NHU-C 2010 RIV CZ eng J - Journal Article
Zemčík, Petr
Housing markets in Central and Eastern Europe: is there a bubble in the Czech Republic?
CERGE-EI Working Paper Series. -, č. 390 (2009), s. 1-37. ISSN 1211-3298
R&D Projects: GA MŠMT LC542; GA ČR GA402/09/1755
Institutional research plan: CEZ:MSM0021620846
Keywords : Central and Eastern Europe * house prices * panel data * unit root
Subject RIV: AH - Economics
http://www.cerge-ei.cz/pdf/wp/Wp390.pdf

Real estate prices more than doubled in many countries of Central and Eastern Europe from 2003 to 2008. In this paper, I provide the first assessment of whether housing prices in this region correspond to rents, i.e. to cash-flows related to an apartment purchase. State-of-the-art panel data stationarity and Granger causality techniques are employed to test the implications of the standard present-value model using regional data from the Czech Republic. Apartment prices both in this country overall and in its capital are only slightly overvalued. In addition, changes in prices are helpful in predicting changes in rents and vice versa.
Permanent Link: http://hdl.handle.net/11104/0176476