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- Title
The missing asymmetry in the Polish house price cycle: an analysis of the behaviour of house prices in 17 major cities.
- Authors
Brzezicka, Justyna; Łaszek, Jacek; Olszewski, Krzysztof; Wisniewski, Radoslaw
- Abstract
This paper investigates the house price cycle in 17 major cities in Poland, analysing separately prices of newly constructed housing and prices in the existing stock. We apply the Andre, Gupta and Mwamba (2019) framework and test the deepness and steepness of the cycles. Deepness concerns the relative magnitude of peaks and downturns, while steepness determines, how fast peaks or downturns are reached. When at least one of those measures is not symmetric, there is asymmetry in the cycle. We apply the triples test and the entropy test and find little evidence for asymmetry, mostly only in small cities. This seems to be intriguing, because usually there are asymmetries, for example slow price increases end in sudden drops. The explanation for the smooth cycle in the Polish housing market are a still not satisfied demand for housing and continuously growing wages. Banks issued mortgages only to the more affluent people, which were able to pay back the mortgage. Additionally, two housing subsidy schemes helped to keep house prices stable, when the situation in the global economy worsened, which might have led to price drops.
- Subjects
POLAND; HOME prices; METROPOLIS; BEHAVIORAL assessment; HOUSING subsidies; HOME ownership; SMALL cities; HOUSING market
- Publication
Journal of Housing & the Built Environment, 2022, Vol 37, Issue 2, p1029
- ISSN
1566-4910
- Publication type
Article
- DOI
10.1007/s10901-021-09861-w