An Attempt to Identify Social – Economic Factors in the Levels Of Property Prices in Chosen Cities in Poland

Sebastian Kokot

doi:10.2478/remav-2018-0028

Abstract

Abstract Property prices vary on different local real estate markets. Even considering only the largest cities, great disproportions between average unit prices can easily be observed. This problem involves all segments of the real estate market, yet, because of the social & economic importance of housing properties, it takes on special importance on the apartment market. In Warsaw - the capital of Poland and the largest Polish city - prices exceed PLN 10,000 per 1m2 in the best locations and the average price at the end of 2016 in the entire city came to over PLN 7,500 per 1m2. At the sme time, however, average prices in other agglomerations, such as Łódź or Katowice, were equal to approx. PLN 3,500 per 1m2. It is only natural to ask what factors, especially social & economic, contribute to such considerable differences in house prices. This article addresses a group of potential factors underlying the prices of apartments, which have been studied statistically in correlation with average unit prices of apartments in chosen cities.

Highlights

The value and, in consequence, the price of a property obtained on the market stems from a range of factors of an economic and social character
The conducted surveys provide grounds for the following conclusions: 1. the proposed factors influence the house prices to a moderate extent, 2. eliminating Warsaw as a significantly different city compared to others in terms of all factors weakens the relations of those factors with apartment prices in respective cities, 3. a somewhat greater impact on the prices is beared by factors that characterise the size of the city vol 26, no. 3, 2018
It can be concluded that some cities are relatively often characterized by a variable corresponding to a particular factor at a level significantly diverging from other cities of similar house prices

Summary

Introduction

The value and, in consequence, the price of a property obtained on the market stems from a range of factors of an economic and social character. Perceiving the real estate market in micro terms means that its local features, which are characteristic for a particular area, are considered These features may include, in particular, the population of an area (e.g. city), unemployment rate in the region, personal income in the region, the broadly understood attractiveness of the region (including touristic attractiveness, quality of the transport service (quality and density of roads, railway connections, urban transport, bike routes), availability and quality of cultural and sports amenities, and other factors (quantifiers) characterising the region’s economic growth, e.g. city revenues, number of enterprises, number of apartments vs population, etc. Analyses of the differentiation of prices between the city centre and suburbs are an example of studies in this respect (compare RĄCKA et al 2017) Considering such perspectives of perceiving the real estate market, the further parts of this article identify a group of potential factors of housing prices in micro terms and statistically study their correlation with average unit prices of apartments in chosen cities. Surveys on the impact of these factors on the prices of apartments and the development of the housing market understood more broadly do not provide grounds for formulating any explicit conclusions (inter alia CAPOZZA et al 2002; FORYŚ 2013)

Statistical data and the survey method

Results of studies

Summary and conclusions