Relationship between real estate and stock market during the coronavirus crises in the Czech Republic

Abstract

This paper deals with the relationship between the residential house price index and the stock markets at the time of the coronavirus pandemic in 2020. The research focuses primarily on the real estate market in the Czech Republic and the development of the Prague Stock Exchange index. The period from 2007 to the end of 2020 is monitored. The subject of the examination is not the assessment of the severity or type of crisis, only the development of markets and their shocks. House price index (HPI) and stock market indices are used for consistent analysis. To find a broader context the mortgage interest rate and the unemployment rate are used. With the help of correlation and analysis of implemented government measures, the basic conditions for the development of indices and measures are sought. Government measures are not only aimed at local conditions, but often also affect cooperation in international trade and traveling. The aim is to evaluate the degree of dependence of the development of real estate and stock markets on measures implemented to reduce the effects of the crisis. The reason is also the fact that there are many common variables (tradable banking companies, local and international investors, etc.).