Macroeconomic influences on housing prices in Prague, the Czech Republic

Marika Schimonová

Master's thesis

Abstract:

This paper studies the determinants of housing prices in Prague, the Czech Republic. The main question addressed is, which of the supply and/or demand factors (housing prices, price of rents, supply of new housing stock, natural population growth, immigration, material input prices, building plot prices, inflow of foreign direct investment, GDP growth, interest rate on mortgages etc.) are the main determinants of prices of flats in Prague. The collected data of determinants are analyzed using mathematical and statistical methods to assess their influence on housing prices in Prague. The econometric model is estimated using the Ordinary Least Square method, where explained variable are indices of realized prices of flats in Prague and explanatory variables are above mentioned determinants of housing prices in Prague. Data used are time series from period Q1 2008 - Q1 2016. The author concludes, that the macroeconomic determinants of residential property prices in Prague are changes in prices of building plots in Prague, economic activity rate in the Czech republic, average monthly gross wages in Prague, price to rent ratio in the CR, volume of long-term loans lent to households and interest rates of mortgages. Trend analysis shows, that further increase in indices of realized prices of flats in Prague is expected in next 2 quarters.

Keywords

Housing market in Prague, Housing prices in Prague, residential properties in Prague, real estate market in Prague, real estate price in Prague?

Language used: English

Date on which the thesis was submitted / produced: 24. 11. 2016

Thesis defence

• Supervisor: doc. Ing. Mansoor Maitah, Ph.D. Ph.D.

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme / field:
Economics and Management / Economics and Management