Abstract
House price dynamics, housing bubbles and housing crisis have drawn public attention. Aside from various policy implications the links between fundamentals and house prices has been tackled with some success both theoretically and empirically. Still new evidence is needed since Covid-19 pandemics has shifted many mechanisms governing housing market behaviour. We investigate the dynamics of house prices in Poland both on metropolitan level from 2000 to 2021. We test whether the price adjustments were caused by fundamental factors such as income, population growth, construction costs. The analysis covers two sub-periods of relatively high house price increases: 2004-2007 and more recent 2017-2021 sub-period. We check whether house prices are similarly related to fundamentals in both subperiods or whether there are distinct differences. Additionally, based on the economic literature we test and compare several housing bubbles indicators. The paper narrows the gap on housing bubbles on regional housing markets, especially in less mature economies.
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