2007年-BIS国际清算银行_Determinants_of_house_prices_in_central_and_eastern_Europe_28页_168kb

Summary of "Determinants of House Prices in Central and Eastern Europe"

Core Content

This paper investigates the determinants of house prices in eight Central and Eastern European (CEE) transition economies and 19 OECD countries. The main focus is on whether conventional economic fundamentals, such as GDP per capita, real interest rates, housing credit, and demographic factors, have influenced house price trends in CEE. The study also highlights the importance of transition-specific factors, including institutional development, housing finance reforms, and improvements in housing quality.

Main Views

• House price dynamics in CEE are largely driven by conventional fundamentals, such as income, interest rates, and credit growth, as well as transition-specific factors like institutional reforms and housing quality.
• House prices in CEE have grown rapidly since 2002, outpacing many OECD countries, despite initially being much lower than western European levels.
• Credit growth has played a significant role in the acceleration of house prices in CEE, with housing loans contributing over 30% to private sector credit growth in 2005 and 2006.
• Demographic and labor market factors have influenced housing demand in CEE, especially as younger generations from the 1970s and early 1980s, now entering their prime earning years, increase demand for housing.
• Institutional development and housing finance reforms have been key enablers of housing market growth, with the EU accession process playing a major role in deregulating the market and improving access to housing loans.
• Housing quality improvements have contributed to rising house prices, as the supply of better-quality housing has increased, leading to a composition effect.
• External demand from EU-15 residents and global investors has also influenced house prices in CEE, especially as housing is increasingly treated as a traded good due to relaxed ownership restrictions and labor mobility.
• Initial price distortions from the socialist era, including artificially low housing prices, have led to a long-term correction in relative housing prices, contributing to the recent price increases.

Key Information

House Price Trends in CEE and OECD

• In 2005, average house prices per square metre in CEE capital cities ranged from 800–900 euros in Bulgaria and Lithuania to 2,000 euros in Croatia and Slovenia.
• In contrast, western European countries had prices ranging from 1,500 euros in Germany, Belgium, and Austria to over 5,000 euros in Spain and France.
• Between 1995 and 2005, real GDP in CEE countries grew by about 50–100%, while real interest rates fell significantly, contributing to house price growth.
• From 2002 onwards, house prices in CEE grew at double-digit annual rates, surpassing most OECD countries.

Credit and Housing Loans

• Housing loans in CEE grew at an average of 58.7% per year between 2000 and 2006, contributing 34% to private sector credit growth.
• The share of housing loans in total private sector credit in CEE averaged 40%, while in selected industrial countries it averaged 56%.
• In some CEE countries like Estonia, the share of foreign currency (FX) loans in total household loans reached 78%, indicating strong reliance on external financing.

Institutional and Regulatory Factors

• Institutional reforms, especially in housing market regulations and judicial practices, have made it easier for creditors to access real estate collateral, boosting housing market activity.
• The EU accession process spurred banking sector restructuring and foreign investment, which improved the availability and affordability of housing loans.

Housing Quality and Supply Constraints

• CEE countries had lower housing quality in 2002 compared to OECD countries, measured by indicators such as dwelling size and access to basic services.
• The limited supply of new housing in CEE, due to the withdrawal of the public sector and slow private sector response, contributed to price increases.
• The composition effect suggests that the increasing share of high-quality housing in the market has driven up average house prices.

External Demand

• External demand from EU-15 residents and global investors has become a significant factor in CEE housing markets.
• This demand influences land prices and, consequently, house prices, especially when zoning regulations are slow to adjust.

Methodology

• The study uses a panel data approach with mean group dynamic OLS (DOLS) estimation to account for cross-country heterogeneity.
• The dataset includes quarterly data for 27 countries, split into OECD and CEE panels, with the CEE panel further divided into slow and fast growth countries.
• The model incorporates real income, real interest rates, credit growth, demographics, institutional development, and housing quality as key determinants.

Conclusion

The paper concludes that house price growth in CEE is driven by a combination of conventional fundamentals and transition-specific factors, such as institutional development, housing finance reforms, and quality improvements. While external demand and supply constraints have also played a role, the main drivers remain economic fundamentals and market reforms. The study emphasizes the importance of policy considerations in ensuring financial stability and sustainable housing market development in CEE.