Macroeconomic variables influencing housing prices in Vilnius
Abstract
The way macroeconomic variables such as unemployment/GDP per capita/inflation/wages/internal migration influenced housing prices (nominal house prices and housing rent prices) in Vilnius in 2006–2019 has been investigated in the research. Conditions under which different macroeconomic variables could influence housing prices were established in the research. Lower unemployment, higher GDP per capita and inflation rate were all related to higher nominal house prices in Vilnius. Higher GDP per capita, wages and internal migration were positively related to housing rent prices in Vilnius. Analyzed macroeconomic variables all together explained 88 percent of variance of nominal house prices in Vilnius over the period of 2006–2019 and 80 percent of variance of housing rent prices in Vilnius over the same period.
First published online 02 December 2021
Keyword : nominal house prices, housing rent prices, rental yield, internal migration, stock price index
How to Cite
Laurinavičius, A., Laurinavičius, A., & Laurinavičius, A. (2022). Macroeconomic variables influencing housing prices in Vilnius. International Journal of Strategic Property Management, 26(1), 24-34. https://doi.org/10.3846/ijspm.2021.15961
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Gonzalez, L., & Ortega, F. (2012). Immigration and housing booms: evidence from Spain. Journal of Regional Science, 53(1), 37–59. https://doi.org/10.1111/jors.12010
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Laurinavičius, A., Laurinavičius, A., & Smilga, E. (2018). Lietuvos strateginio iškilimo gairės. Vilniaus universiteto leidykla.
Liu, M., & Ma, Q.-P. (2021). Determinants of house prices in China: a panel-corrected regression approach. Annals of Regional Science, 67, 47–72. https://doi.org/10.1007/s00168-020-01040-z
Ma, Q. P. (2010). Housing market in China’s growth recovery and house price determination. In 21st CEA (UK) and 2nd CEA (Europe) Annual Conference Global Economic Recovery: The Role of China and Other Emerging Economies (pp. 12–13), University of Oxford, UK.
Mohan, S., Hutson, A., MacDonald, I., & Lin, C. C. (2019). Impact of macroeconomic indicators on housing prices. International Journal of Housing Markets and Analysis, 12(6), 1055–1071. https://doi.org/10.1108/IJHMA-09-2018-0070
Ober-Haus. (2020). Housing prices in Lithuania. https://www.ober-haus.lt/en/ohbi-calculator/
Ong, T. S., & Chang, Y. S. (2013). Macroeconomic determinants of Malaysian housing market. Human and Social Science Research, 1(2), 119–127.
Organisation for Economic Co-operation and Development. (2021). Housing prices (indicator). https://doi.org/10.1787/63008438-en
Panagiotidis, T., & Printzis, P. (2016). On the macroeconomic determinants of the housing market in Greece: a VECM approach. International Economics and Economic Policy, 13(3), 387–409. https://doi.org/10.1007/s10368-016-0345-3
Pavlov, A., & Somerville, T. (2020). Immigration, capital flows and housing prices. Real Estate Economics, 48(3), 915–949. https://doi.org/10.1111/1540-6229.12267
Rehman, S. K. U., Moutinho, N. F. L., & Alves, J. M. A. (2020). The relationship between Portugues economy indicators and housing prices. Journal of Spatial and Organizational Dynamics, 8(4), 270–286.
Sá, F. (2015). Immigration and house prices in the UK. The Economic Journal, 125(587), 1393–1424. https://doi.org/10.1111/ecoj.12158
Saiz, A. (2007). Immigration and housing rents in American cities. Journal of Urban Economics, 61(2), 345–371. https://doi.org/10.1016/j.jue.2006.07.004
Schnure, C. (2005). Boom-bust cycles in housing: the changing role of financial structure IDEAS (Working Paper Series from RePEc). International Monetary Fund. https://doi.org/10.5089/9781451862195.001
Sharpe, J. (2019). Re-evaluating the impact of immigration on the U.S. rental housing market. Journal of Urban Economics, 111, 14–34. https://doi.org/10.1016/j.jue.2019.04.001
Sheather, S. (2009). A modern approach to regression with R. Springer. https://doi.org/10.1007/978-0-387-09608-7
Snieška, V., Navickas, V., & Jegelavičiūtė, R. (2019). The interaction between the migration of human resources and the prices of housing: Lithuanian case. Transformations in Business & Economics, 46(1), 199–213.
Tan, Z., & Chen, M. (2013). House prices as indicators of monetary policy: evidence from China (Working Paper No. 488). Stanford University.
Tang, J., Ye, K., & Qian, Y. (2019). Rethinking the relationship between housing prices and inflation: new evidence from 29 large cities in China. International Journal of Strategic Property Management, 23(3), 142–155. https://doi.org/10.3846/ijspm.2019.7800
Tyrcha, A. (2020). Migration and housing markets – evidence from Sweden [Doctoral thesis]. Robinson College, Department of Land Economy, University of Cambridge. https://doi.org/10.2139/ssrn.3394234
Tomal, M. (2021). Exploring the meso-determinants of apartment prices in Polish counties using spatial autoregressive multiscale geographically weighted regression. Applied Economics Letters, 1–9. https://doi.org/10.1080/13504851.2021.1891194
Tsatsaronis, K., & Zhu, H. (2004). What drives housing price dynamics. Cross-country evidence. BIS Quarterly Review, 1, 65–78.
Wang, X., Hui, E., & Sun, J. (2017). Population migration, urbanization and housing prices: evidence from the cities in China. Habitat International, 66, 49–56. https://doi.org/10.1016/j.habitatint.2017.05.010
Wen, H., & Goodman, A. C. (2013). Relationship between urban land price and housing price: evidence from 21 provincial capitals in China. Habitat International, 40, 9–17. https://doi.org/10.1016/j.habitatint.2013.01.004
Al-Masum, M. A., & Lee, C. L. (2019). Modelling housing prices and market fundamentals: evidence from the Sydney housing market. International Journal of Housing Markets and Analysis, 12(4), 746–762. https://doi.org/10.1108/IJHMA-10-2018-0082
Apergis, N. (2003). Housing prices and macroeconomic factors: prospects within the European Monetary Union. International Real Estate Review, 6(1), 63–74. https://doi.org/10.1080/1350485032000100260
Aruodas. (2020). Real estate price statistics. https://en.aruodas.lt/kainu-statistika/
Braakmann, N. (2019). Immigration and the property market: evidence from England and Wales. Real Estate Economics, 47(2), 509–533. https://doi.org/10.1111/1540-6229.12151
Capozza, D. R., Hendershott, P. H., Mack, C., & Mayer, C. J. (2002). Determinants of real house price dynamics (Working Paper Series No. 9262). National Bureau of Economic Research. https://doi.org/10.3386/w9262
Cochrane, W., & Poot, J. (2019). The effects of immigration on local housing markets (Working Paper in Economics No. 7/19). University of Waikato.
Coskun, Y., Seven, U., Ertugrul, H. M., & Alp, A. (2020). Housing price dynamics and bubble risk: the case of Turkey. Housing Studies, 35(1), 50–86. https://doi.org/10.1080/02673037.2017.1363378
Duan, J. L., Tian, G. J., Yang, L., & Zhou, T. (2021). Addressing the macroeconomic and hedonic determinants of housing prices in Beijing Metropolitan Area, China. Habitat International, 113, 102374. https://doi.org/10.1016/j.habitatint.2021.102374
Egert, B., & Mihaljek, D. (2007). Determinants of house prices in Central and Eastern Europe (BIS Working Papers No. 236). Bank for International Settlements.
Gan, L., & Zhang, Q. (2013). Market thickness and the impact of unemployment on housing market outcomes (Working Paper No. 19564). National Bureau of Economic Research. https://doi.org/10.3386/w19564
Gonzalez, L., & Ortega, F. (2012). Immigration and housing booms: evidence from Spain. Journal of Regional Science, 53(1), 37–59. https://doi.org/10.1111/jors.12010
Goodhart, C., & Hofmann, B. (2008). House prices, money, credit and the macroeconomy (Working Paper Series No. 888). European Central Bank. https://doi.org/10.1093/oxrep/grn009
Hirata, H., Kose, M. A., Otrok, C., & Terrones, M. E. (2013). Global house price fluctuations: synchronization and determinants (IMF Working Paper No. WP/13/18k). International Monetary Fund. https://doi.org/10.2139/ssrn.2295211
Hjalmarsson, E., & Osterholm, P. (2020). Heterogeneity in households’ expectations of housing prices – evidence from micro data. Journal of Housing Economics, 50, 101731. https://doi.org/10.1016/j.jhe.2020.101731
Huber, P. J. (2004). Robust statistics. John Wiley & Sons.
Ionascu, E., Taltavull de La Paz, P., & Mironiuc, M. (2021). The relationship between housing prices and market transparency. Evidence from the metropolitan European markets. Housing Theory & Society, 38(1), 42–71. https://doi.org/10.1080/14036096.2019.1672577
Yu, H., & Huang, Y. (2016). Regional heterogeneity and the trans-regional interaction of housing prices and inflation: evidence from China’s 35 major cities. Urban Studies, 53(16), 3472–3492. https://doi.org/10.1177/0042098015617882
Kuang, W., & Liu, P. (2015). Inflation and house prices: theory and evidence from 35 major cities in China. International Real Estate Review, 18(1), 217–240. https://doi.org/10.53383/100200
Kutner, M. H., Nachtsheim, C. J., & Neter, J. (2004). Applied linear regression models (4th ed.). McGraw-Hill Irwin.
Larkin, M. P., Askarov, Z., Doucouliagos, H., Dubelaarb, C., Klona, M., Newton, J., Stanley, T. D., & Vocino, A. (2019). Do house prices ride the wave of immigration? Journal of Housing Economics, 46, 101630. https://doi.org/10.1016/j.jhe.2019.04.002
Laurinavičius, A., Laurinavičius, A., & Laurinavičius, A. (2021). Impact of housing affordability and other socioeconomic variables on internal migration in Lithuania. International Journal of Strategic Property Management, 25(2), 102–114. https://doi.org/10.3846/ijspm.2020.13604
Laurinavičius, A., Laurinavičius, A., & Smilga, E. (2018). Lietuvos strateginio iškilimo gairės. Vilniaus universiteto leidykla.
Liu, M., & Ma, Q.-P. (2021). Determinants of house prices in China: a panel-corrected regression approach. Annals of Regional Science, 67, 47–72. https://doi.org/10.1007/s00168-020-01040-z
Ma, Q. P. (2010). Housing market in China’s growth recovery and house price determination. In 21st CEA (UK) and 2nd CEA (Europe) Annual Conference Global Economic Recovery: The Role of China and Other Emerging Economies (pp. 12–13), University of Oxford, UK.
Mohan, S., Hutson, A., MacDonald, I., & Lin, C. C. (2019). Impact of macroeconomic indicators on housing prices. International Journal of Housing Markets and Analysis, 12(6), 1055–1071. https://doi.org/10.1108/IJHMA-09-2018-0070
Ober-Haus. (2020). Housing prices in Lithuania. https://www.ober-haus.lt/en/ohbi-calculator/
Ong, T. S., & Chang, Y. S. (2013). Macroeconomic determinants of Malaysian housing market. Human and Social Science Research, 1(2), 119–127.
Organisation for Economic Co-operation and Development. (2021). Housing prices (indicator). https://doi.org/10.1787/63008438-en
Panagiotidis, T., & Printzis, P. (2016). On the macroeconomic determinants of the housing market in Greece: a VECM approach. International Economics and Economic Policy, 13(3), 387–409. https://doi.org/10.1007/s10368-016-0345-3
Pavlov, A., & Somerville, T. (2020). Immigration, capital flows and housing prices. Real Estate Economics, 48(3), 915–949. https://doi.org/10.1111/1540-6229.12267
Rehman, S. K. U., Moutinho, N. F. L., & Alves, J. M. A. (2020). The relationship between Portugues economy indicators and housing prices. Journal of Spatial and Organizational Dynamics, 8(4), 270–286.
Sá, F. (2015). Immigration and house prices in the UK. The Economic Journal, 125(587), 1393–1424. https://doi.org/10.1111/ecoj.12158
Saiz, A. (2007). Immigration and housing rents in American cities. Journal of Urban Economics, 61(2), 345–371. https://doi.org/10.1016/j.jue.2006.07.004
Schnure, C. (2005). Boom-bust cycles in housing: the changing role of financial structure IDEAS (Working Paper Series from RePEc). International Monetary Fund. https://doi.org/10.5089/9781451862195.001
Sharpe, J. (2019). Re-evaluating the impact of immigration on the U.S. rental housing market. Journal of Urban Economics, 111, 14–34. https://doi.org/10.1016/j.jue.2019.04.001
Sheather, S. (2009). A modern approach to regression with R. Springer. https://doi.org/10.1007/978-0-387-09608-7
Snieška, V., Navickas, V., & Jegelavičiūtė, R. (2019). The interaction between the migration of human resources and the prices of housing: Lithuanian case. Transformations in Business & Economics, 46(1), 199–213.
Tan, Z., & Chen, M. (2013). House prices as indicators of monetary policy: evidence from China (Working Paper No. 488). Stanford University.
Tang, J., Ye, K., & Qian, Y. (2019). Rethinking the relationship between housing prices and inflation: new evidence from 29 large cities in China. International Journal of Strategic Property Management, 23(3), 142–155. https://doi.org/10.3846/ijspm.2019.7800
Tyrcha, A. (2020). Migration and housing markets – evidence from Sweden [Doctoral thesis]. Robinson College, Department of Land Economy, University of Cambridge. https://doi.org/10.2139/ssrn.3394234
Tomal, M. (2021). Exploring the meso-determinants of apartment prices in Polish counties using spatial autoregressive multiscale geographically weighted regression. Applied Economics Letters, 1–9. https://doi.org/10.1080/13504851.2021.1891194
Tsatsaronis, K., & Zhu, H. (2004). What drives housing price dynamics. Cross-country evidence. BIS Quarterly Review, 1, 65–78.
Wang, X., Hui, E., & Sun, J. (2017). Population migration, urbanization and housing prices: evidence from the cities in China. Habitat International, 66, 49–56. https://doi.org/10.1016/j.habitatint.2017.05.010
Wen, H., & Goodman, A. C. (2013). Relationship between urban land price and housing price: evidence from 21 provincial capitals in China. Habitat International, 40, 9–17. https://doi.org/10.1016/j.habitatint.2013.01.004