| Abstract [eng] |
The real estate market is a significant component of the economy overall. Economy’s ups and downs strongly correlating with real estate’s market cycles, so knowing price levels and how they are changing is important for sustainable economic growth. In thesis it has been chosen to analyze the prices of apartments in the capitals of Baltic countries. The apartment market is relevant to most of the people groups, from individuals to real estate developers, analysts and other business groups. Theoretical part of the thesis defines the concept of real estate, division into groups, explains the apartment market, and factors that has influence on the prices of apartments. In the research part of the work comparative analysis of statistical data was made, models describing price growth rates of apartments in Vilnius, Tallinn and Riga were compiled, estimates of the variables included in the models were calculated as well as quarterly forecasts of apartment prices in Vilnius, Tallinn and Riga for 2019 and 2020. The results analyzed and compared with the real market situation. The considered period is 2007-2018. The object of the study - prices of apartments in the capitals of Lithuania, Latvia and Estonia. The aim of the study - to calculate quarterly price forecasts for apartments in the Baltic capitals in 2019 and 2020. Work tasks: • To evaluate the literature related to the apartment market and price changes. • To identify which factors have the biggest, direct impact on apartment prices. • To design models describing the growth rate of apartment prices. • To calculate apartment price forecasts. • To perform an analysis of the current and forecasted apartment market. Research methods - comparative analysis of scientific literature and statistics, econometric analysis using ARMA and linear multiple regression models. A comparative analysis of the selected factors found that the values of all the variables under consideration have significantly deteriorated during the financial crisis and since then all indicators have steadily improved gradually. Forecasts of independent variables which are included in models describing the growth rate of apartment prices in Vilnius, Tallinn and Riga suggest that all indicators (GDP per capita, average net earnings, unemployment and mortgage rates) should continue to move in a positive direction. Estimated quarterly price of 1 square meter forecasts for 2019 and 2020 indicate that prices in Vilnius by 2020 Q1 should increase, and from 2020 Q2 begin to decrease. Tallinn apartment prices are expected to fall from 2019 Q2 and in Riga for the whole forecast period. The paper discusses that the drop in apartment prices is projected due to the negative free factor included in the model and that it is modeled for 2007-2008 apartment prices plummeted during the financial crisis. Actual data of 2019 first three quarters indicates that apartment prices have increased in all capitals under review, which is mainly due to rising wages, rising housing affordability index and rising demand. For these reasons, it has been suggested to choose a longer period of time for other apartment price forecasting studies in the Baltic capitals and to include in the model a variable representing the real population in the capitals. |
