Abstract
Using a unique dataset of 4.6 million offers, we investigate the convergence of 28 regional housing markets in Poland from 2000 to 2019. The objective of the paper is twofold. First, we test whether the house prices in Poland are converging over time and identify convergence clubs. Second, we compare the housing market convergence before and after the global financial crisis. The test results suggest that there is little evidence of overall convergence. We identified three major convergence clubs in Poland formed during the study period. However, the results differed when considering subperiods (before and after the 3rd quarter of 2008)—we found three and four clubs in subperiods and some divergent housing markets. The paper fills the gap in knowledge on the convergence of regional housing markets within an emerging economy setting. Little is known about this phenomenon in Eastern European Countries with their unique institutional framework. Additionally, we address differences in house price convergence before, and after the financial crisis, a topic often overlooked in other empirical studies.
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Notes
The legal difference between the cooperative ownership right to premises and the ownership right is the right to use the real estate. The housing cooperative is the owner of the building and the perpetual usufructuary or owner of the land under the building. In the case of ownership of separate premises, the holder is entitled to ownership of the residential premises and a share in the co-ownership of the land. While the ownership gives the full right to use and dispose of the property, the cooperative right to premises requires the cooperative's opinion to be taken into account in most decisions concerning the property.
However, the way in which information on the transactions of these rights is collected is different, and access to it is radically different. The secondary housing market in Poland is dominated by two forms of apartment ownership: outright ownership rights (about 75% of apartment transactions) and cooperative ownership rights (about 25% of apartment transactions). In the case of the ownership rights, transaction information is collected by 380 units (country starosts and mayors of towns with poviat rights). Prices are recorded in the Property Price Register (PPR), as well as: the address of the location of the property, numbers of plots of land included in the property, type of property, area of land, date of conclusion of a notarial deed or determination of value and other available data about the property and its components. The cooperative ownership rights and information on transaction prices are not collected in the PPR—from a legal point of view, such premises are not real estate. This causes enormous difficulties in obtaining information on transactions in this law. Moreover, given the number of cooperatives and how they store and make these data available, this is a cost-intensive activity. Obtaining such data requires transcription of information from notarial deeds concerning individual premises.
To supplement and confirm the obtained results, we focused on establishing the moment of the financial crisis to divide the whole period into pre and post-crisis (initially, we chose the third quarter of 2008). We verify two other moments: one quarter earlier and one quarter later. Investigating the moment of splitting the studied period into subperiods, we notice no differences in club converegnace formation.
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This work was supported by the National Science Centre of Poland under Grant number 2017/27/B/HS4/01848.
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Trojanek, R., Gluszak, M., Kufel, P. et al. Pre and post-financial crisis convergence of metropolitan housing markets in Poland. J Hous and the Built Environ 38, 515–540 (2023). https://doi.org/10.1007/s10901-022-09953-1
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DOI: https://doi.org/10.1007/s10901-022-09953-1