Comparison of property price development in regions affected by mining with other regions of the CR

Klára Čermáková, Eduard Hromada, Veronika Machová

Comparison of property price development in regions affected by mining with other regions of the CR

Číslo: 2/2022
Periodikum: Acta Montanistica Slovaca
DOI: 10.46544/AMS.v27i2.16

Klíčová slova: Property market; Housing affordability; Income; Monetary policy; Own housing

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Anotace: The property market has experienced a sharp increase in prices

recently, which indicates a different nature of the Covid 19
downturn of the economy compared with usual economic crises.
This paper identifies key features of the property market which may
help understand why the property market performs differently from
other markets. A number of factors play an important role in
shaping real estate prices, some of which can and cannot be
influenced. The quality of the environment is often one of the main
important factors, which is also presented by air pollution values.
Apart from transport, waste incineration and thermal power plants,
the most common causes of air pollution include the mining
industry's activities. We aim to explain why property prices do not
converge across regions, but prices in expensive regions experience
an even stronger price dynamics, a recent phenomenon. We argue
that the price dynamics have been predominantly demand-driven in
a market with an unelastic and lacking supply of new properties.
The real estate market was also significantly affected by the
monetary and fiscal policies of individual states. It has been found
that money, which has been invested on a large scale in all sectors
of the economy in order to limit the negative effects of pandemic
measures, has often found its way to investing in assets of all kinds.
As a result, real estate prices are rising sharply, especially in richer
areas with minimal unemployment. This article aims to offer a
deeper insight into the relationship between flats/house prices and
variables that proved to be significantly correlated to prices in
regional decomposition. Finally, we suggest ways for sustainable
future development of the property market.