How macroeconomic factors impact residential real estate prices in Eastern Europe
Abstract
Purpose – This study examines how GDP growth, interest rates, and unemployment rates influence residential real estate prices in politically and economically stable Eastern Euro- pean countries, aiming to identify key drivers of property value changes in the region.
Research methodology – The study uses multiple linear regression and Pearson correlation (r) to assess the relationship between variables and housing prices, with ARIMA (3,1,0) applied for short-term price forecasts based on cyclical time series trends.
Findings – The findings show a strong correlation between macroeconomic indicators and residential real estate prices, with the key influencing factor varying by country, reflecting diverse market sensitivities and regional economic contexts.
Research limitations – The research is limited to Eastern European countries with stable political and economic conditions, excluding those facing instability. Future studies could expand the analysis to include such regions to provide a more comprehensive view.
Practical implications – The results provide valuable guidance for policymakers and investors in crafting strategies tailored to specific macroeconomic conditions, enhancing market predictions and stability.
Originality/Value – By focusing on the underexplored residential real estate market in Eastern Europe, this study contributes novel insights into regional housing price determinants and offers a foundation for further research on macroeconomic impacts in real estate markets.
Keyword : real estate, macroeconomic, prices, interest rates, unemployment rate, GDP growth, Europe
How to Cite
Okunevičiūtė Neverauskienė, L., Linkevičius, D., & Andriušaitienė, D. (2025). How macroeconomic factors impact residential real estate prices in Eastern Europe. Business, Management and Economics Engineering, 23(1), 30–43. https://doi.org/10.3846/bmee.2025.22663
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Kitsos, T., Grabner, S. M., & Carrascal-Incera, A. (2023). Industrial embeddedness and regional economic resistance in Europe. Economic Geography, 99(3), 227–252. https://doi.org/10.1080/00130095.2023.2174514
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Kowalczyk, C., Nowak, M., & Źróbek, S. (2019). The concept of studying the impact of legal changes on the agricultural real estate market. Land Use Policy, 86, 229–237. https://doi.org/10.1016/j.landusepol.2019.05.012
Laurinavičius, A., Laurinavičius, A., & Laurinavičius, A. (2021). Macroeconomic variables influencing housing prices in Vilnius. International Journal of Strategic Property Management, 26(1), 24–34. https://doi.org/10.3846/ijspm.2021.15961
Li, J., Fang, W., Shi, Y., & Ren, C. (2022). Assessing economic, social and environmental impacts on housing prices in Hong Kong: A time-series study of 2006, 2011 and 2016. Journal of Housing and the Built Environment, 37, 1433–1457. https://doi.org/10.1007/s10901-021-09898-x
Lim, T. (2018). Growth, financial development, and housing booms. Economic Modelling, 69, 91–102. https://doi.org/10.1016/j.econmod.2017.09.008
OECD. (n.d.). Housing prices [Data]. https://data.oecd.org/price/housing-prices.htm
Oishi, S., & Kesebir, S. (2015). Income inequality explains why economic growth does not always translate to an increase in happiness. Psychological Science, 26(10), 1630–1638. https://doi.org/10.1177/0956797615596713
Pandey, S., Gupta, S., & Chhajed, S. (2021). ROI of AI: Effectiveness and measurement. International Journal of Engineering Research & Technology, 10(5), 749–761. https://doi.org/10.2139/ssrn.3858398
Philippe, H., & Patrick, M. (2020). Influence of gross domestic product (GDP) on real estate prices in Rwanda. International Journal of Innovative Research and Development, 9(4), 77–82. https://doi.org/10.24940/ijird/2020/v9/i4/APR20041
Reed, R. R., & Ume, E. S. (2016). Housing and unemployment: The search for the “American Dream.” Journal of Macroeconomics, 48, 72–86. https://doi.org/10.1016/j.jmacro.2016.01.001
Shen, S. (2021). Empirical research on the impact of real estate on economic development. Journal of Mathematical Finance, 11(2), 246–254. https://doi.org/10.4236/jmf.2021.112014
Strauss, D. (2019). A policy framework for sustainable real estate in the European Union. In T. Walker, C. Krosinsky, L. N. Hasan, & Kibsey, S. D. (Eds.), Sustainable real estate. Palgrave studies in sustainable business in association with future earth (pp. 77–111). Palgrave Macmillan. https://doi.org/10.1007/978-3-319-94565-1_5
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Thi Nguyen, M.-L., & Ngoc Bui, T. (2019). Stock market, real estate market, and economic growth: An ARDL approach. Investment Management and Financial Innovations, 16(4), 290–302. https://doi.org/10.21511/imfi.16(4).2019.25
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Uyanık, G. K., & Güler, N. (2013). A study on multiple linear regression analysis. Procedia – Social and Behavioral Sciences, 106, 234–240. https://doi.org/10.1016/j.sbspro.2013.12.027
Vonlanthen, J. (2023). Interest rates and real estate prices: A panel study. Swiss Journal of Economics and Statistics, 159, Article 6. https://doi.org/10.1186/s41937-023-00111-0
Wilhelmsson, M. (2020). What role does the housing market play for the macroeconomic transmission mechanism? Journal of Risk and Financial Management, 13(6), Article 112. https://doi.org/10.3390/jrfm13060112
Yakub, A. A., Achu, K., Ali, H. M., & Abdul Jalil, R. (2022). An analysis of the determinants of office real estate price modelling in Nigeria: Using a Delphi approach. Property Management, 40(5), 758–779. https://doi.org/10.1108/PM-08-2021-0060
Zhang, J., Wolfram, D., & Ma, F. (2023). The impact of big data on research methods in information science. Data and Information Management, 7(2), Article 100038. https://doi.org/10.1016/j.dim.2023.100038
Aziz, B. (2012). Financial crisis 2007–2009. How real estate bubble and transparency and accountability issues generated and worsen the crisis. Estudios Fronterizos, Nueva Época, 13(6), 201–221. https://doi.org/10.21670/ref.2012.26.a08
Baek, I., Lee, S., Lee, J., & Kim, J. (2021). Analysis of housing market dynamics considering the structural characteristics of mortgage interest. Sustainability, 13(19), Article 10523. https://doi.org/10.3390/su131910523
Bełej, M. (2023). Predicting housing price trends in Poland: Online social engagement – Google trends. Real Estate Management and Valuation, 31(4), 73–87. https://doi.org/10.2478/remav-2023-0032
Chirilus, A. I. (2023). Forecasting real estate prices in Romania: A lag optimized linear approach. Baltic Journal of Real Estate Economics and Construction Management, 11(1), 120–132. https://doi.org/10.2478/bjreecm-2023-0008
Dagan, D. T., & Wilkins, E. J. (2023). What is “big data” and how should we use it? The role of large datasets, secondary data, and associated analysis techniques in outdoor recreation research. Journal of Outdoor Recreation and Tourism, 44, Article 100668. https://doi.org/10.1016/j.jort.2023.100668
Dey, S. R. (2019). The relationship between income, consumption and GDP of Asian countries: A panel analysis. Managing Global Transitions, 17(2), 113–127. https://doi.org/10.26493/1854-6935.17.113-127
Dogan, C., & Topuz, J. C. (2020). Real effects of real estate: Evidence from unemployment rates. Studies in Economics and Finance, 37(4), 605–623. https://doi.org/10.1108/SEF-03-2019-0124
Ersoz, F., Ersoz, T., & Soydan, M. (2018). Research on factors affecting real estate values by data mining. Baltic Journal of Real Estate Economics and Construction Management, 6(1), 220–239. https://doi.org/10.2478/bjreecm-2018-0017
European Central Bank. (2023a). Monetary policy decisions. https://www.ecb.europa.eu/press/govcdec/mopo/html/index.en.html
European Central Bank. (n.d.). ECB data portal. https://data.ecb.europa.eu/
European Commission. (2023). Spring 2023 economic forecast: An improved outlook amid persistent challenges. https://economy-finance.ec.europa.eu/economic-forecast-and-surveys/economic-forecasts/spring-2023-economic-forecast-improved-outlook-amid-persistent-challenges_en
Freybote, J., & Seagraves, P. (2018). The impact of investor sentiment on commercial real estate market liquidity. Journal of Real Estate Research, 40(4), 597–628. https://doi.org/10.1080/10835547.2018.12091513
Gaur, A., Settles, A., & Väätänen, J. (2023). Do economic sanctions work? Evidence from the Russia‐Ukraine conflict. Journal of Management Studies, 60(6), 1391–1414. https://doi.org/10.1111/joms.12933
Gecevičius, V. (2020). Nekilnojamojo turto rinkos signalų apie ekonominius ciklus vertinimas [Magistro darbas, Šiaulių universitetas].
Golob, K., Bastic, M., & Psunder, I. (2012). Analysis of impact factors on the real estate market: Case Slovenia. Engineering Economics, 23(4), 357–367. https://doi.org/10.5755/j01.ee.23.4.2566
Graham, J., & Read, A. (2023). House prices, monetary policy and commodities: Evidence from Australia. Economic Record, 99(324), 1–31. https://doi.org/10.1111/1475-4932.12705
Grum, B., & Govekar, D. K. (2016). Influence of macroeconomic factors on prices of real estate in various cultural environments: Case of Slovenia, Greece, France, Poland and Norway. Procedia Economics and Finance, 39, 597–604. https://doi.org/10.1016/S2212-5671(16)30304-5
Hromada, E. (2019, May 22–24). Real estate prices in the Czech Republic: Behavioral approach. In Proceedings of the 18th International Scientific Conference Engineering for Rural Development (pp. 1795–1800). Jelgava, Latvia. https://doi.org/10.22616/ERDev2019.18.N087
Jang, H., Song, Y., Sohn, S., & Ahn, K. (2018). Real estate soars and financial crises: Recent stories. Sustainability, 10(12), Article 4559. https://doi.org/10.3390/su10124559
Kang, H., & Zhao, H. (2020). Description and application research of multiple regression model optimization algorithm based on data set denoising. Journal of Physics: Conference Series, 1631(1), Article 012063. https://doi.org/10.1088/1742-6596/1631/1/012063
Kang, J., Lee, H. J., Jeong, S. H., Lee, H. S., & Oh, K. J. (2020). Developing a forecasting model for real estate auction prices using artificial intelligence. Sustainability, 12(7), Article 2899. https://doi.org/10.3390/su12072899
Katafygiotou, M., Protopapas, P., & Dimopoulos, T. (2023). How sustainable design and awareness may affect the real estate market. Sustainability, 15(23), Article 16425. https://doi.org/10.3390/su152316425
Kitsos, T., Grabner, S. M., & Carrascal-Incera, A. (2023). Industrial embeddedness and regional economic resistance in Europe. Economic Geography, 99(3), 227–252. https://doi.org/10.1080/00130095.2023.2174514
Kontopoulou, V. I., Panagopoulos, A. D., Kakkos, I., & Matsopoulos, G. K. (2023). A review of ARIMA vs. machine learning approaches for time series forecasting in data driven networks. Future Internet, 15(8), Article 255. https://doi.org/10.3390/fi15080255
Kowalczyk, C., Nowak, M., & Źróbek, S. (2019). The concept of studying the impact of legal changes on the agricultural real estate market. Land Use Policy, 86, 229–237. https://doi.org/10.1016/j.landusepol.2019.05.012
Laurinavičius, A., Laurinavičius, A., & Laurinavičius, A. (2021). Macroeconomic variables influencing housing prices in Vilnius. International Journal of Strategic Property Management, 26(1), 24–34. https://doi.org/10.3846/ijspm.2021.15961
Li, J., Fang, W., Shi, Y., & Ren, C. (2022). Assessing economic, social and environmental impacts on housing prices in Hong Kong: A time-series study of 2006, 2011 and 2016. Journal of Housing and the Built Environment, 37, 1433–1457. https://doi.org/10.1007/s10901-021-09898-x
Lim, T. (2018). Growth, financial development, and housing booms. Economic Modelling, 69, 91–102. https://doi.org/10.1016/j.econmod.2017.09.008
OECD. (n.d.). Housing prices [Data]. https://data.oecd.org/price/housing-prices.htm
Oishi, S., & Kesebir, S. (2015). Income inequality explains why economic growth does not always translate to an increase in happiness. Psychological Science, 26(10), 1630–1638. https://doi.org/10.1177/0956797615596713
Pandey, S., Gupta, S., & Chhajed, S. (2021). ROI of AI: Effectiveness and measurement. International Journal of Engineering Research & Technology, 10(5), 749–761. https://doi.org/10.2139/ssrn.3858398
Philippe, H., & Patrick, M. (2020). Influence of gross domestic product (GDP) on real estate prices in Rwanda. International Journal of Innovative Research and Development, 9(4), 77–82. https://doi.org/10.24940/ijird/2020/v9/i4/APR20041
Reed, R. R., & Ume, E. S. (2016). Housing and unemployment: The search for the “American Dream.” Journal of Macroeconomics, 48, 72–86. https://doi.org/10.1016/j.jmacro.2016.01.001
Shen, S. (2021). Empirical research on the impact of real estate on economic development. Journal of Mathematical Finance, 11(2), 246–254. https://doi.org/10.4236/jmf.2021.112014
Strauss, D. (2019). A policy framework for sustainable real estate in the European Union. In T. Walker, C. Krosinsky, L. N. Hasan, & Kibsey, S. D. (Eds.), Sustainable real estate. Palgrave studies in sustainable business in association with future earth (pp. 77–111). Palgrave Macmillan. https://doi.org/10.1007/978-3-319-94565-1_5
Sung, R., Owen, E., & Li, Q. (2021). How do capital and labor split economic gains in an age of globalization? Review of International Political Economy, 28(1), 232–257. https://doi.org/10.1080/09692290.2019.1677744
Thi Nguyen, M.-L., & Ngoc Bui, T. (2019). Stock market, real estate market, and economic growth: An ARDL approach. Investment Management and Financial Innovations, 16(4), 290–302. https://doi.org/10.21511/imfi.16(4).2019.25
Usta, A. (2021). İktisadi aktivite ve işsizlik oraninin konut talebi üzerine etkileri: Türkiye için vektör hata düzeltme modeli tahmini [The impact of economic activity and unemployment rate on housing demand: Estimating a vector error correction model for Turkey]. Gümüşhane Üniversitesi Sosyal Bilimler Enstitüsü Elektronik Dergisi, 12(3), 1157–1168.
Uyanık, G. K., & Güler, N. (2013). A study on multiple linear regression analysis. Procedia – Social and Behavioral Sciences, 106, 234–240. https://doi.org/10.1016/j.sbspro.2013.12.027
Vonlanthen, J. (2023). Interest rates and real estate prices: A panel study. Swiss Journal of Economics and Statistics, 159, Article 6. https://doi.org/10.1186/s41937-023-00111-0
Wilhelmsson, M. (2020). What role does the housing market play for the macroeconomic transmission mechanism? Journal of Risk and Financial Management, 13(6), Article 112. https://doi.org/10.3390/jrfm13060112
Yakub, A. A., Achu, K., Ali, H. M., & Abdul Jalil, R. (2022). An analysis of the determinants of office real estate price modelling in Nigeria: Using a Delphi approach. Property Management, 40(5), 758–779. https://doi.org/10.1108/PM-08-2021-0060
Zhang, J., Wolfram, D., & Ma, F. (2023). The impact of big data on research methods in information science. Data and Information Management, 7(2), Article 100038. https://doi.org/10.1016/j.dim.2023.100038