Why the market value of residential premises and the costs of its purchase differ: The examples of Belarus and Poland

Siarhei Manzhynski, Sabina Źróbek, Olga Batura and Elżbieta Zysk

Land Use Policy, 2018, vol. 71, issue C, 530-539

Abstract: The purpose of this study is to investigate features of transaction costs (fees and taxes) regarding real estate deals and to analyze transaction costs in the real estate market in emerging and established economies in order to research the link between the extent of market development and transaction costs. The authors’ methodological approach to estimation of transaction costs consists of qualitative and quantitative stages and is based on descriptive, normative and statistical information, which allows estimation and comparison of transaction costs as well as their structure and sources of occurrence by types. The two cases were chosen for practical implementation of the method: a transition economy of Belarus and a relatively established market economy of Poland. In order to measure transaction costs, the authors use the example of a residential property in order to provide a comparable basis for further analysis. Application of the method to the most prevalent pattern of real estate deals shows sufficient comparability of transaction costs (ca. 2.5%) and a slight difference (ca. 4%) caused by the absence of transaction tax in Belarus.

Keywords: Transaction costs; Residential market; Security of real estate acquisition (search for similar items in EconPapers)
JEL-codes: K34 O21 R00 R28 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:lauspo:v:71:y:2018:i:c:p:530-539

DOI: 10.1016/j.landusepol.2017.11.012

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