Alina Stundziene, Vaida Pilinkiene and Andrius Grybauskas
This paper aims to identify the economic stimulus measures that ensure stability of the Lithuanian housing market in the event of an economic shock.
Abstract
Purpose
This paper aims to identify the economic stimulus measures that ensure stability of the Lithuanian housing market in the event of an economic shock.
Design/methodology/approach
The econometric analysis includes stationarity test, Granger causality test, correlation analysis, autoregressive distributed lag models and cointegration analysis using ARDL bounds testing.
Findings
The econometric modelling reveals that the housing price in Lithuania correlates with quarterly changes in the gross domestic product and approves that the cycles of the real estate market are related to the economic cycles. Economic stimulus measures should mainly focus on stabilizing the economics, preserving the cash and deposits of households, as well as consumer spending in the case of economic shock.
Originality Value
This study is beneficial for policy makers to make decisions to maintain stability in the housing market in the event of any economic shock.
Details
Keywords
Alina Stundziene, Vaida Pilinkienė and Andrius Grybauskas
This paper aims to identify the external factors that have the greatest impact on housing prices in Lithuania.
Abstract
Purpose
This paper aims to identify the external factors that have the greatest impact on housing prices in Lithuania.
Design/methodology/approach
The econometric analysis includes stationarity test, Granger causality test, correlation analysis, linear and non-linear regression modes, threshold regression and autoregressive distributed lag models. The analysis is performed based on 137 external factors that can be grouped into macroeconomic, business, financial, real estate market, labour market indicators and expectations.
Findings
The research reveals that housing price largely depends on macroeconomic indicators such as gross domestic product growth and consumer spending. Cash and deposits of households are the most important indicators from the group of financial indicators. The impact of financial, business and labour market indicators on housing price varies depending on the stage of the economic cycle.
Practical implications
Real estate market experts and policymakers can monitor the changes in external factors that have been identified as key indicators of housing prices. Based on that, they can prepare for the changes in the real estate market better and take the necessary decisions in a timely manner, if necessary.
Originality/value
This study considerably adds to the existing literature by providing a better understanding of external factors that affect the housing price in Lithuania and let predict the changes in the real estate market. It is beneficial for policymakers as it lets them choose reasonable decisions aiming to stabilize the real estate market.