Rent Deregulation, Tenure Choice, and Real Estate Price Expectations

Ashot Tsharakyan and Petr Zemcik ()

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: We study a natural experiment in the Czech Republic where the maximum regulated rent appreciation has depended explicitly on the price of real estate since 2007. We track the tenure choice of households from consumption surveys for subsequent years. Rent deregulation makes households in regulated apartments more likely to own real estate while the opposite is true for other renters and owners. The net present value of buying property vs renting is an increasing function of the real estate price appreciation for renters in regulated apartments. We use their tenure choice to generate the distribution of property price expectations.

Keywords: Czech Republic; expectations; rent regulation and deregulation; real estate prices; tenure choice (search for similar items in EconPapers)
JEL-codes: C25 R21 R31 (search for similar items in EconPapers)
Date: 2011-01
New Economics Papers: this item is included in nep-reg, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:cer:papers:wp430

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