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ANALYSIS OF THE HOUSING AFFORDABILITY AND ITS COMPARISON BETWEEN CZECH REPUBLIC AND LITHUANIA

ANALYSIS OF THE HOUSING AFFORDABILITY AND ITS COMPARISON BETWEEN CZECH REPUBLIC AND LITHUANIA. Ing. David Slavata, Ph.D. Department of Public Economy Faculty of Economics , VŠB – TU Ostrava. LITHUANIA, ERASMUS 2018 Alytus – 7. 11. 2018. The Aim of the Lesson.

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ANALYSIS OF THE HOUSING AFFORDABILITY AND ITS COMPARISON BETWEEN CZECH REPUBLIC AND LITHUANIA

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  1. 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

  2. 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.

  3. The questions • In whichofourcountriesthereishigher probability ofhousingaffordability? • Ifyouwouldhave 150 000 EUR, in what country youwouldprefare to investto reachhigher profit? • In whatofourcountriesthereishigher risk ofhousingpricedecrease?

  4. The House Price Index by Eurostat (2015 Q1 = 100)

  5. 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)

  6. We need to indicate: • Flat prices • Monthly payed rents • Salaries

  7. The Data Sources • www.czso.cz • www.trzniceny.cz • Eurostat • www.numbeo.com

  8. Flat Prices in EUR

  9. Salaries and rate of interest

  10. Rental Yields in %

  11. Historical Annual Wages 1861 - 1943

  12. Average Price Per One Flat Family House

  13. Annual Rents 1861 - 1943

  14. 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 %

  15. Reasons of overvaluation in Czech Republic • Mortgage interests • Increase of wages • Demographical aspects • Impact of monetary policy

  16. Reasons for overvaluation of flats in Lithuania • Restrictions for buing of real estates (?) • Mortgage interest • Transfer of finances from abroad

  17. 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?

  18. Thank You for Your Attention

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