Is There an East European Housing Bubble?

2006 ◽  
Vol 6 (3) ◽  
pp. 1850094 ◽  
Author(s):  
Robert C. Shelburne ◽  
Jose Palacin
Keyword(s):  
Interest Rates ◽  
Foreign Currency ◽  
House Price ◽  
Special Treatment ◽  
Housing Bubble ◽  
Policy Options ◽  
East European ◽  
Economic Fundamentals ◽  
Price Trends ◽  
European Economies

This study examines residential house price trends in the East European economies. The data are described and evaluated in terms of their quality and reliability; both official data from national statistical offices and that compiled by real estate companies are used. Current prices are evaluated in terms of the economic fundamentals in the region including GDP growth rates, interest rates, rental prices, alternative asset prices, and the availability of mortgages. The role of foreign currency mortgages is given special treatment given their importance in a number of countries and the vulnerabilities they introduce. For some of the markets a more detailed description of price trends by region or type of property is provided. Comparisons with western markets are made where appropriate. Generally it is concluded that price increases have been quite significant but any over appreciation is difficult to evaluate given the very positive changes in the economic fundamentals. In addition to price trends, the implications of the changing institutional structure of these mortgage markets are explained along with the implications of the housing market developments for consumer spending, fiscal and monetary policy. The possibility of a housing bubble and bust is examined along with its implications for the economy; policy options to minimize this likelihood and its consequences are also explored with due consideration of the limitations on macroeconomic policy options given the constraints imposed by euro accession in a number of the countries.

What Factors Determine Changes in House Prices and Rents?

2020 ◽  
pp. 39-56
Author(s):  
Geoffrey Meen ◽  
Christine Whitehead
Keyword(s):  
Interest Rates ◽  
House Prices ◽  
House Price ◽  
Empirical Work ◽  
International Standards ◽  
Macroeconomic Conditions ◽  
Price Trends ◽  
The Uk ◽  
Different Parts ◽  
Over Time

Whatever measure of affordability is used house prices and rents play a central role and Chapter 3 is concerned with what causes these two variables to change over time and vary across different parts of the country. Although increases in house prices have been particularly strong in the UK by international standards, other countries are also discussed. In fact, house price trends and volatility can be explained by a fairly small number of variables – and their influence has been remarkably consistent over the last fifty years. The problem has been rather that house prices are very sensitive to changes in incomes, interest rates and credit conditions and these vary greatly over time. Therefore, modest changes in macroeconomic conditions have disproportionate effects on housing. UK empirical work on market rents is less well-developed than for house prices, but the chapter considers the reasons why rents appear to have risen at a slower rate than house prices.

scholarly journals Is there a trade convergence between South East European and Central European economies

2021 ◽  
Vol 66 (231) ◽  
pp. 7-31
Author(s):  
Goran Nikolic ◽  
Ivan Nikolic
Keyword(s):  
European Countries ◽  
Eastern European ◽  
Similarity Coefficients ◽  
East European ◽  
Economic Fundamentals ◽  
Trade Performance ◽  
Eastern European Countries ◽  
Merchandise Trade ◽  
European Economies ◽  
Qualitative Changes

Given the importance of trade performance to overall economic fundamentals, the question arises as to the extent that South East European Countries (SEEC) have successfully followed the successful transition path of Central and Eastern European Countries (CEEC). To address this issue, we use similarity indicators to calculate possible convergence between the export structures of SEEC and CEEC from 2007-2008 to 2018-2019. We then compute the value of the similarity coefficients of SEEC and CEEC export structures and compare them with EU import structures, and intra-industry trade for both SEEC and CEEC. Next, we calculate the qualitative changes of both SEEC and CEEC merchandise trade through the tendency of technology-intensive products. The results of these two groups are compared to determine whether SEEC trade performance is converging to that of the CEEC. The results show structural improvements and an above-average increase in SEEC trade since 2007. However, given the simultaneous, moderate qualitative trade progress in the CEEC, the convergence between these two groups is insufficient to close the gap in the foreseeable future.

Implications of Brexit for Skilled Migration from India to the UK

2021 ◽  
pp. 001573252110122
Author(s):  
Rupa Chanda ◽  
Neha Vinod Betai
Keyword(s):  
Transition Period ◽  
The European Union ◽  
Jel Codes ◽  
Decision To Leave ◽  
East European ◽  
The United Kingdom ◽  
Take Back ◽  
The Uk ◽  
European Economies ◽  
The Eu

In June 2016, the United Kingdom took the world by surprise with the results of its referendum on whether to remain in the European Union (EU). With a 52% majority, the country decided to leave the bloc in which it had been a member since 1973. With this outcome began the long process of Brexit negotiations between UK and the EU. The UK officially ceased to be an EU member on 31 January 2020, with a transition period up to the end of 2020. The decision to leave the EU came on the back of rising bitterness among people. Membership in the EU was seen as expensive and not beneficial to the country. One of the major campaigning points of the leave camp was the issue of immigration. Given that free movement of people is an important part of being in the EU, the party argued that leaving the EU would help the country take back control of its borders. Immigration in the UK has been on the rise since the early 2000s. It shot up further with the accession of the eight East European economies into the EU. Figure 1 shows how, leading up to Brexit, immigration from the EU to the UK was constantly increasing. JEL Codes: F00, F30, F22, F23

DOLARIZATION OF THE FINANCIAL MARKET OF UKRAINE: CAUSES, EVOLUTION, CONSEQUENCES

2021 ◽  
Vol 1 (21(49)) ◽  
pp. 56-66
Author(s):  
Ihor Krupka
Keyword(s):  
Interest Rates ◽  
Financial Market ◽  
Foreign Currency ◽  
Banking System ◽  
Market Potential ◽  
National Currency ◽  
Foreign Banks ◽  
Stable Operation ◽  
Negative Consequences ◽  
International Financial Market

The purpose of the article is to assess the level of domestic financial market dollarization, find out the causes of this economic phenomenon, trace its evolution and identify current features, substantiate proposals to minimize the negative consequences for the financial market and the economy in general. The methods of theoretical analysis, synthesis and generalization, analysis of statistical data and its graphical interpretation are used in the research. The results of the research showed that the main reasons for dollarization in Ukraine were high inflation and sharp fluctuations in the exchange rate of the national currency. In general, the dollarization of national financial markets occurs through the following channels: 1) borrowing on the international financial market; 2) the entrance of foreign banks to a domestic market; 3) investing abroad, when a national financial market is not sufficiently developed to create high-quality and highly liquid assets, dollarization provides rapid access to foreign financial assets and optimization of the profitability and risk structure of an investment portfolio; 4) the difference (spread) between interest rates in national and foreign currency. Based on the study of the domestic financial market, the following conclusions are made: 1) the level of Ukraine`s financial market dollarization in the aggregate and in terms of its separate segments is high; 2) this level poses a threat to the stable operation of financial intermediaries and the banking system in case of the national currency devaluation; 3) currency imbalance of assets and liabilities in the banking system has strongly decreased since 2008, but is still significant; 4) foreign currency is widely used by economic agents in the shadow sector of the economy. We consider the current dollarization level dangerous for the development of the country's financial system, and its reduction to a scientifically sound natural level should become one of the main tasks of the National Bank of Ukraine. Achieving the natural dollarization level and effective use of the domestic financial market potential will allow to intensify Ukraine's national economy development and promote integration into the international financial market and the global financial space.

scholarly journals Liquidity, interest rates and house prices in the euro area: a DSGE analysis

2016 ◽  
Vol 9 (1) ◽  
pp. 4-25 ◽  
Author(s):  
Margarita Rubio ◽  
José A. Carrasco-Gallego
Keyword(s):  
Interest Rates ◽  
Monetary Union ◽  
Euro Area ◽  
House Prices ◽  
Housing Prices ◽  
House Price ◽  
Dsge Model ◽  
Content Type ◽  
The Core ◽  
Dynamic Stochastic

Purpose This study aims to build a two-country monetary union dynamic stochastic general equilibrium (DSGE) model with housing to assess how different shocks contributed to the increase in housing prices and credit in the European Economic and Monetary Union. One of the countries is calibrated to represent the core group in the euro area, while the other one corresponds to the periphery. Design/methodology/approach In this paper, the authors explore how a liquidity shock (or a decrease in the interest rate) affects house prices and the real economy through the asset price and the collateral channel. Then, they analyze how a house price shock in the periphery and a technology shock in the core countries are transmitted to both economies. Findings The authors find that a combination of an increase in liquidity in the euro area coming from the common monetary policy, together with asymmetric house price and technology shocks, contributed to an increase in house prices in the euro area and a stronger credit growth in the peripheral economies. Originality/value This paper represents the theoretical counterpart to empirical studies that show, through macroeconometric models, the interrelation between liquidity and other shocks with house prices. Using a DSGE model with housing, the authors disentangle the mechanisms behind these empirical findings.

Creating a Development Bank to Finance Affordable Housing in South Africa is a Timely Catalyst to Address Demand and Supply Challenges

2020 ◽  
pp. 810-826
Author(s):  
Vuyisani Moss
Keyword(s):  
South Africa ◽  
Interest Rates ◽  
Affordable Housing ◽  
House Price ◽  
Disposable Income ◽  
Development Bank ◽  
Demand And Supply ◽  
Private Sector Participation ◽  
Mortgage Finance ◽  
Mortgage Interest Rates

The twin problems of affordability and accessibility that hamper the progress of housing in our country need to be addressed on a sustainable basis and the state needs to take on the role as a facilitator to create the enabling environment to encourage greater private sector participation. As a consequence, it is quite opportune to establish the Human Settlements Development Bank (HSDB). The mortgage finance affordability challenge is also attributable to key essential drivers, namely; house price index, disposable income, and the mortgage interest rates.

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