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A comprehensive analysis of housing affordability in Czech Republic and Lithuania, comparing historical real estate data, price indexes, and factors influencing the housing market in both countries. Explore investment opportunities and the risk of housing price decrease.
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ANALYSIS OF THE HOUSING AFFORDABILITY AND ITS COMPARISON BETWEEN CZECH REPUBLIC AND LITHUANIA Ing. David Slavata, Ph.D. Department of Public Economy FacultyofEconomics, VŠB – TU Ostrava LITHUANIA, ERASMUS 2018 Alytus – 7. 11. 2018
The Aim of the Lesson • To analyzehousingaffordability in selectedEuropeancountries and to compareitwiththesituation in Czech Republic and in Lithuania. • To compare and analyzehistoricalrealestate market data of Czech (Czechoslovakia) • To indicatepresentovervaluationorundervaluationofflats in Lithuania and in Czech Republic.
The questions • In whichofourcountriesthereishigher probability ofhousingaffordability? • Ifyouwouldhave 150 000 EUR, in what country youwouldprefare to investto reachhigher profit? • In whatofourcountriesthereishigher risk ofhousingpricedecrease?
The Indicators PI ratio = P / I PGDP ratio = P / GDP PW ratio = P / W MI ratio = M / I PR ratio = P / R OUn = (P/In+ P/Rn) – sum ((P/I + P/R)/N) / sum ((P/I + P/R)/N)
We need to indicate: • Flat prices • Monthly payed rents • Salaries
The Data Sources • www.czso.cz • www.trzniceny.cz • Eurostat • www.numbeo.com
Comparison to the level of present prices of European countries: +32,15% Comparison to the level of historical Czech (Czechoslovak, Habsburk Empire) prices: +36,11 %
Reasons of overvaluation in Czech Republic • Mortgage interests • Increase of wages • Demographical aspects • Impact of monetary policy
Reasons for overvaluation of flats in Lithuania • Restrictions for buing of real estates (?) • Mortgage interest • Transfer of finances from abroad
The answers • In which of our countries there is higher probability of housing affordability? • If you would have 150 000 EUR, in what country you would prefare to invest to reach higher profit? • In what of our countries there is higher risk of housing price decrease?