Abstract
The aim of the paper is to examine the causal relationship between the real property prices in biggest Polish cities within VAR model framework. Both offer and transactional prices are used. Existing stock market, as well as primary market are analysed. The data are quarterly and taken from 17 biggest Polish cities. The analysed period is 2006-2015. Both VAR and VECM approaches were applied. Their limitations and possible predictions were discussed. A significant interaction between various regional real estate markets in Poland has been observed. However, the leading role of the capital city could not be confirmed by the methodology used.
Highlights
The real property prices in Poland have significantly increased in past few years
The aim of the paper is to examine the causal relationship between the real property prices in the biggest Polish cities within vector autoregression model (VAR) and VECM model frameworks
The analysis started from a VAR estimation
Summary
The real property prices in Poland have significantly increased in past few years. This situation is not just a Polish characteristic, but similar increases have been observed in other economies. Some researchers suggest that a house price bubble has occurred; in other words, that the situation cannot be explained on the basis of fundamental factors (Żelazowski, 2011). Recently, Narodowy Bank Polski (2015) has started to publish the reliable time series of house prices in biggest Polish cities. This is because the free market is relatively recent phenomena in Poland
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