Best predictors of apartment prices: Empirical Evidence from Czechia

• Název práce v češtině: Optimální ukazatele cen bytů: Empirická analýza pro Českou republiku
• Název v anglickém jazyce: Best predictors of apartment prices: Empirical Evidence from Czechia
• Akademický rok vypsání: 2017/2018
• Typ práce: bakalářská práce
• Jazyk práce: angličtina
• Ústav: Institut ekonomických studií (23-IES)
• Vedoucí / školitel: Petr Pleticha, M.Sc., Ph.D.
• Řešitel: Mgr. Ondřej Šváb - zadáno vedoucím/školitelem
• Datum přihlášení: 25.05.2018
• Datum zadání: 25.05.2018
• Datum a čas obhajoby: 09.09.2019 09:00
• Místo konání obhajoby: Opletalova - Opletalova 26, O105, Opletalova - místn. č. 105
• Datum odevzdání elektronické podoby: 31.07.2019
• Datum proběhlé obhajoby: 09.09.2019
• Oponenti: PhDr. Karolína Vozková, Ph.D.

Seznam odborné literatury

Bibliography
P. Posedel, M. Vizek, ‘House price determinants in transition and EU-15 countries’, Post-Communist Economies, vol. 21, no. 3, pp. 327-343, September 2009.
M. D. Bordo, O. Jeanne, ‘Boom-busts asset prices, economic instability, and monetary policy’, National bureau of economic research, p. 38, June 2002.
M. Hlaváček, L. Komárek, ‘Housing Price Bubles and their Determinants in the Czech Republic and its Regions’, Czech National Bank, p. 54, December 2009.
P. Zemčík, ‘Is There a Real Estate Bubble in the Czech Republic?’, Czech Journal of Economics and Finance, vol. 61, no. 1, pp. 49-66, 2011.
M. Hlaváček, L. Komárek, ‘Regional Analysis of Housing Price Bubbles and Their Determinants in the Czech Republic, Czech Journal of Economics and Finance, vol. 61, no. 1, pp. 67-91, 2011.
I. Kubicová, L. Komárek, ‘The Classification and Identification of Assets Price Bubbles’, Czech Journal of Economics and Finance, vol. 61, no. 1, pp. 34-48, 2011.
S. Gilchrist and J. V. Leahy, ‘Monetary policy and asset prices’, Journal of Monetary Economics, p. 23, 2002.
S. G. Cecchetti, H. Genberg, J. Lipsky, and S. Wadhwani, ‘Asset Prices and Central Bank Policy’, The Geneva Report on the world Economy, No. 2, p. 152, May 2000.
E. F. Fama, ‘Efficient Capital Markets: A Review of Theory and Empirical Work’, The Journal of Finance, vol. 25, no. 2, pp. 383-417, May 1970.
W. C. Hunter, G. G. Kaufman, and M. Pomerleano, ‘Asset Price Bubbles: The Implications for Monetary, Regulatory, and International Policies’. MIT Press, pp. 3-80, 2005.

Předběžná náplň práce

Research question and motivation
I would like to study the growing prices of a real estate that has been rapidly growing last few years in many European metropolises as well as in the Czech Republic. More precisely said, if we talk about the Czech Republic, we focus on Prague and other major towns of particular districts in the country. The growth of prices will be compared with other macroeconomic determinants as unemployment or economic growth. The significance of this work is given by the possibility of the real estate market’s overheating. It could lead to the creation of price bubbles which are harmful to economic stability. The price bubble in real estate markets contributed to the
Great recession after the steep decline in housing prices. Since the collateral of property has a lower current price. If there is an insolvent creditor, banks have a higher loss due to mortgages provided on the overvalued housing.

Contribution
I would like to conduct empirical analysis based on existing data. Moreover, the literature has to be updated since statistical offices publish new figures each quartile. Most of the papers, to my knowledge, are not up to date. The increase of prices has changed last years. Thus, the expectation of raising interest rates by the Central Bank could slow down the growth. Results might be used as a warning sign for the real estate market. The model might determine whether the price of a currently selling asset is adequate or not. From another point of view, there are only few scholars in our country who have studied this economic area. For instance, I would like
to build on the literature of M. Hlaváček, L. Komárek or P. Zemčík.

Methodology
I am going to use data provided by the Czech statistical office and by Eurostat. Using those time series data, e.g. Housing index prices, the unemployment rate or the economic growth in a region, I would like to create a statistical model. Comparing relevant variables, the hypothesis of the bubbling market should be tested. Moreover, applying the basic econometric methods, I would like to analyze the real estate market in the Czech Republic.

Outline
1. Introduction
2. Literature review
3. Summarization of methods used in the analysis
4. Description of collected data
5. Analysis of the model and testing hypothesis
6. Empirical macroeconomic consequences and their impact on the market
7. Conclusion