Low Interest Rates and Uncreative Destruction in the Office Market

Olszewski Krzysztof (), Trojanowski Dariusz () and Łaszek Jacek ()
Additional contact information
Olszewski Krzysztof: Warsaw School of Economics, al. Niepodległości 162, 02-554 Warszawa, Poland; Narodowy Bank Polski, ul. Świętokrzyska 11/21; 00-919 Warszawa, Poland
Trojanowski Dariusz: University of Gdańsk, ul. Jana Bażyńskiego 8, 80-309 Gdańsk, Poland
Łaszek Jacek: Warsaw School of Economics, al. Niepodległości 162, 02-554 Warszawa, Poland; Narodowy Bank Polski, ul. Świętokrzyska 11/21; 00-919 Warszawa, Poland

Real Estate Management and Valuation, 2024, vol. 32, issue 2, 90-99

Abstract: Low interest rates were introduced in the global economy to support the weak economic growth that followed the global financial crisis. In the real estate sector, low interest rates usually lead to a boom in investment and prices. This boom, however, is not spread throughout the economy, but rather concentrated in major cities. We demonstrate this phenomenon on the example of the office market in Warsaw (Poland). While it would be beneficial for the Polish economy to develop office space in smaller cities that have an insufficient supply of modern office space, investors have focused mainly on the capital. This has not only led to an increase in the cost of building land and construction, but has also pushed some relatively new existing office buildings off the market. We call such behaviour uncreative destruction and explain why it was possible.

Keywords: predatory competition; low interest rates; office market (search for similar items in EconPapers)
JEL-codes: E22 R12 R30 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/remav-2024-0018 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:remava:v:32:y:2024:i:2:p:90-99:n:1008

DOI: 10.2478/remav-2024-0018

Access Statistics for this article

Real Estate Management and Valuation is currently edited by Sabina Zrobek

More articles in Real Estate Management and Valuation from Sciendo
Bibliographic data for series maintained by Peter Golla ().