Acta Universitatis Danubius. Œconomica, Vol 10, No 4 (2014)

Abstract

Housing market and housing price dynamics are very important to the economy. About 65% of households in the western world and 85% of Albania's own private apartment. The market of residential estates is very complex and influenced by many factors, some of which are hard to be measured. Such factors include handling of taxes and remittances. The analysis of such factors becomes more complicated by the interference of temporary trends during the period that some explanatory variables  have at their disposal. This generates an important identification problem, which prevents the accurate evaluation of long-term changes in the housing prices.

The data used in this study are extracted from reports of Bank of Albania, INSTAT, IMF and newspaper “Celes” as well as from surveys to individual purchasers, investors and developers. Through the model it is analyzed the development of residential estates’ market compared to the historical trend of housing prices and to the theoretical determinant.

The econometric model used is a generalized multiple regression equation. The model allows us to see the dynamic interaction between the housing prices and the variables selected according to hypotheses on the very complex economic structure associated with this market.