Dynamics and asymmetric rent adjustments in the office market in Warsaw

Dynamics of rent, vacancy, supply and demand on the office market of emerging commercial real estate markets have long been under-researched. The paper fills the gap in economic literature by investigating the growing office market in Warsaw. In particular, we evaluate whether the influence of demand and supply shocks differ depending on the current market conditions. Using Error Correction Model approach, we investigated the rent adjustments on the office market in Warsaw, which is the major property market in Central and Eastern Europe. We replaced variables of the basic model with asymmetric variables to check for asymmetric adjustments in the office market. The study period covers data from 2005:1Q to 2016:1Q. The empirical results suggest that demand shock had a stronger impact on rent when the market vacancy rate was below the average for the period considered. Additionally, the demand shock had a stronger impact on rent when the rent was above the equilibrium level

The effect of urban green spaces on house prices in Warsaw

In the paper, we analysed the impact of proximity to urban green areas on apartment prices in Warsaw. The data-set contained in 43 075 geo-coded apartment transactions for the years 2010 to 2015. In this research, the hedonic method was used in Ordinary Least Squares (OLS), Weighted Least Squares (WLS) and Median Quantile Regression (Median QR) models. We found substantial evidence that proximity to an urban green area is positively linked with apartment prices. On an average presence of a green area within 100 meters from an apartment increases the price of a dwelling by 2,8% to 3,1%. The effect of park/forest proximity on house prices is more significant for newer apartments than those built before 1989. We found that proximity to a park or a forest is particularly important (and has a higher implicit price as a result) in the case of buildings constructed after 1989. The impact of an urban green was particularly high in the case of a post-transformation housing estate. Close vicinity (less than 100 m distance) to an urban green increased the sales prices of apartments in new residential buildings by 8,0–8,6%, depending on a model

Land acquisition in development projects: investment value and risks

The aim of the article is to discuss the main problems in land-development activity. The study focuses on land acquisition problem. In the article we describe possible implications of difference between real estate market and investment value, and enumerate major sources of investment risk. (author´s abstract)Series: SRE - Discussion Paper

Supply, Demand and Asymmetric Adjustment of House Prices in Poland

In recent years, a lot of empirical effort has been made to search for potential nonlinear responses of house prices to various demand and supply factors. This paper examines Poland's heterogeneous regional housing market reactions to key economic variables from 2000 to 2022. The study raises two research questions related to the asymmetric adjustment of housing markets to selected demand and supply shocks

Repeat sales index for residential real estate in Krakow

Research background: There are several methods to construct a price index for infrequently traded real estate assets (mainly residential, but also office and land). The main concern to construct a valid and unbiased price index is to address the problem of heterogeneity of real estate, or put differently to control for both observable and unobservable quality attributes. Most frequently used is probably hedonic regression methodology (classic, but recently also spatial and quantile regression). An alternative approach to control for unobservable differences in assets' quality is provided by repeat sales methodology, where price changes are tracked based on differences in prices of given asset sold twice (or multiple times) within the study period. The later approach is applied in famous S&P CoreLogic Case-Shiller house price indices. Purpose of the article: The goal of the paper is to assess the applicability of repeat sales methodology for a major housing market in Poland. Previous studies used hedonic methodology or mix adjustment techniques and applied for major metropolitan areas. Most known example is a set of quarterly house price indices constructed by NBP - especially for primary and secondary market. The repeat sales methodology has not been adopted with significant success to date - mainly because of concern regarding relative infrequency of transactions on housing market in most metropolitan areas (thus potentially small sample of repeated sales). Methodology/methods: The study uses data on repeat sales of residential transactions in Krakow from 2003 to 2015. We apply different specifications of repeat sales index construction and compare respective values to hedonic price index for Krakow estimated by NBP. Findings: Findings suggest that repeat sales house sales indices can be used to track price dynamics for major metropolitan areas in Poland. The study suggests problems that need to be addresses in order to get unbiased results - mainly data collection mechanism and estimation procedure

Property tax autonomy and tax mimicking in major metropolitan areas in Poland

Research background: Real estate and urban economics literature is abundant in studies discussing various types of property taxes and their characteristics. Growing area of research focused on tax equity, tax competition, and tax mimicking. Recently, due to substantial developments in spatial and regional economics more attention was drawn to spatial effects. Empirical results are focused on spatial interaction and diffusion effects, hierarchies of place and spatial spillovers. Property tax system in Poland differs from those utilized in the majority of developed countries. As a consequence, property tax policy at local government level (including tax competition and tax mimicking effects) in Poland can differ substantially from those found in previous research in US and other European countries. There are few studies addressing the problem of tax competition and tax mimicking in Poland from empirical perspective. Purpose of the article: In the article we explore spatial dependences in property taxation. We identify clustering or dispersion of high and low values of the tax rates within major metropolitan areas in Poland. The effects can indicate presence of tax mimicking among municipalities in given metropolitan areas. Methodology/methods: We analyze the panel data from 304 municipalities in 10 metropolitan areas in Poland from year 2007 to 2016. The data covers four property tax rates: (1) on residential buildings (2) on buildings used for business purpose (3) on land used for business purpose (4) on land for other uses. To explore spatial distribution of rates we used global and local spatial autocorrelation indicators (Moran's I statistic and LISA). Findings: The results suggest the presence of spatial correlation within metropolitan areas. We also found significant differences between metropolitan areas. The results of the study fill the gap in empirical research concerning property tax mimicking in Poland