engleski

Asymmetric price transmission in Croatia within the real estate market

Croatia has experienced a huge volatility, expressed in rapid growth, fall, stagnation and revival of the real estate market in recent decade. The City of Zagreb has the most transactions in real estate business and the Adriatic Coast participate as second in market share. This study is an attempt to test the relationship between the price indices of real estate, in those two regions, over the 2006M6–-2016M3 period. For this purpose, we have chosen the threshold cointegration and an asymmetric error correction model approaches. Some of these regions have been the price leader of the market and its price has been evolving more independently. Whether it is due to swelling demand for dwelling, stimulated by thriving tourism industry that priority gives to Adriatic or accession of Croatia to the European Union that gives advantage to capital city will be tested by Granger-causality test. In this paper it is assumed that the transmission between the prices of those regions has been asymmetric in both the long term and short term.

Price, Real estate, Threshold cointegration, Asymmetric ECM, Croatia

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