Determinants of House Price Dynamics in CEE
Language:
English
Provider:
OeNB
Pages:
25
This paper examines the determinants of house price dynamics in Central and Eastern
European (CEE) transition economies. While we emphasize the role of conventional
fundamental factors, we also highlight the importance of transition-specifi c factors in
house price dynamics in the region. We take a comparative approach by looking at
various panels composed of eight CEE transition economies (Bulgaria, Croatia, the
Czech Republic, Estonia, Hungary, Lithuania, Poland and Slovenia) and 19 industrialized
non-CEE OECD countries. The use of these panels provides insights into the common
determinants of house prices for the two groups of countries and, at the same time,
allows us to identify the reasons for important differences in house price dynamics
across countries. Overall, this paper shows that the growth in house prices in Central
and Eastern Europe can be explained fairly well by the development of conventional
underlying fundamentals and transition-specific factors.