Work detail

Regional Determinants of Residential Real Estate Prices in the Czech Republic

Author: Mgr. Roman Kalabiška
Year: 2019 - summer
Leaders: PhDr. Michal Hlaváček Ph.D.
Consultants:
Work type: Finance, Financial Markets and Banking
Masters
Language: English
Pages: 79
Awards and prizes:
Link: https://is.cuni.cz/webapps/zzp/detail/202263/
Abstract: This thesis aims to examine the behaviour of residential real estate prices and
identify their determinants across Czech regions. After cointegration of the data
was detected, a panel dynamic OLS estimator was employed. Initially, the effect
of a wide range of variables on apartment prices is analyzed on quarterly data for
all regions of the Czech Republic. Furthermore, an error correction model is
employed to verify the existence of long-term equilibrium of apartment prices and
the speed of price adjustment in the short run. The regression revealed that
apartment prices are driven mainly by building plot prices, wages,
unemployment, net migration and REER. Next, several regions with unique
characteristics were excluded from the sample and analyzed separately in order
to check robustness of the selected model. The results of PDOLS regression imply
that apartment prices react very differently to certain determinants in different
groups of regions. Lastly, in order to examine these reactions in different time
periods, the dataset was divided by the time dimension. The results suggest that
the effect of unemployment was the largest during the financial crisis of 2007/2008
and that the effects of wages and building plot prices have been changing
dramatically over time.

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