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2013 | nr 35 | 5--23
Tytuł artykułu

Housing market cycles - a disequilibrium model and its application to the primary housing market in Warsaw

Treść / Zawartość
Warianty tytułu
Języki publikacji
EN
Abstrakty
EN
This paper presents a simple disequilibrium model in the primary housing market, calibrated to the Warsaw market. Our aim is to point out that the primary housing market, due to the long construction process is always in disequilibrium, which has important policy implications. We discuss the last housing cycle and show how a combination of slight demand shocks with short-term rigid supply leads to strong fluctuations of house prices and new construction. The primary market can create a significant distress to the economy, because when house prices rise, this sector attracts capital and workers and is able to generate excessive supply, which finally can lead to the burst of the price bubble. The cyclical character is a permanent feature of the property market and can be explained by the inelasticity of supply. Market participants form price and demand expectations based on past observations. This causes frequent cycles that, under specific conditions, can lead to economic crises. We believe that the model describes the reality of the primary housing market better than equilibrium models do, so it can be useful for central banks and financial supervision institutions in the analysis of the impact of fiscal and monetary policy and regulations on the real estate market. (original abstract)
Rocznik
Numer
Strony
5--23
Opis fizyczny
Twórcy
  • Narodowy Bank Polski
  • Szkoła Główna Handlowa w Warszawie; Narodowy Bank Polski
  • Narodowy Bank Polski
  • Narodowy Bank Polski
Bibliografia
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  • Augustyniak, H., J. Łaszek, K. Olszewski and J. Waszczuk (2014), Modelling of cycles in the residential real estate markets - interactions between the primary and the secondary market and multiplier effects, Kwartalnik Nauk o Przedsiębiorstwie 2/2014 (31).
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  • Levin, E. J. and G. Pryce (2009), What Determines the Responsiveness of Housing Supply? The Role of Real Interest Rates and Cyclical Asymmetries., Housing Studies 24(6), 713-736.
  • Lin, C. and S. Lin (1999), An Estimation of Elasticities of Consumption Demand and Investment Demand for Owner-Occupied Housing in Taiwan: A Two-Period Model, International Real Estate Review, Vol. 2, 110-125.
  • Łaszek, J. (2013), Housing and consumer theory, In: Report on the situation in the Polish residential and commercial real estate market in 2012, NBP.
  • Łaszek J. and K. Olszewski (2014). Zachowania firmy deweloperskiej na rynku mieszkań i zagregowana podaż. Mimeo.
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  • NBP (2012b), Information on home prices and the situation in the residential and commercial real estate market in Poland in 2012 (Q1 and Q2).
  • NBP (2013a), Information on home prices and the situation in the residential and commercial real estate market in Poland in 2013 Q1.
  • NBP (2013b), Report on the situation in the Polish residential real estate market in 2012 r.
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Typ dokumentu
Bibliografia
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Identyfikator YADDA
bwmeta1.element.ekon-element-000171283233

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