Dependence of Housing Real Estate Prices on Inflation as One of the Most Important Factors: Poland’s Case

Melnychenko Oleksandr (), Osadcha Tetiana (), Kovalyov Anatoliy () and Matskul Valerii ()
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Melnychenko Oleksandr: Department of Finance, Gdansk University of Technology, Poland; The London Academy of Science and Business, United Kingdom
Osadcha Tetiana: Accounting and Taxation Department, Odesa Mechnikov National University, Ukraine
Kovalyov Anatoliy: Odessa National Economic University, Ukraine
Matskul Valerii: Mathematical Methods of Economic Analysis Department, Odessa National Economic University, Ukraine

Real Estate Management and Valuation, 2022, vol. 30, issue 4, 25-41

Abstract: The study aimed to examine the impact of inflation on the real estate market using Polish panel data for the last 13 years. It is based on a panel model, where price changes of one square meter of housing are determined as a function in changes of inflation, the central bank’s base rate, dwellings built, as well as new mortgage loans. The quarterly dynamics of the average price of 1 square meter of housing in Poland’s eight largest cities in the 2009-2021 period was studied. This price was modeled and predicted using one of the Box-Jenkins time series models: the Holt-Winter model of exponential smoothing with a damped trend. The forecasting results showed a small (up to 4%) relative error in comparison with the actual data. In addition, the moment (2017) of the price trend change was found. Therefore, piecewise linear regressions with high regression coefficients were used when modeling the impact of inflation changes on the real estate market indicators under consideration. The results obtained provide valuable insight into the relationship of real estate market indicators, allowing consumers to predict available options and make decisions in accordance with their preferences.

Keywords: real estate; housing; inflation; Poland (search for similar items in EconPapers)
JEL-codes: R15 R31 R42 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:remava:v:30:y:2022:i:4:p:25-41:n:8

DOI: 10.2478/remav-2022-0027

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