Harmonized index of consumer prices impact on real estate market in Baltic countries

Abstract

The real estate market is a significant component of the global economy, attracting the attention of both investors and economists. Its dynamic nature has made it a widely studied subject, especially concerning its impact on the market itself. Through comprehensive analysis of economic data and market trends, it aims to elucidate the extent to which changes in consumer prices influence various aspects of the real estate sector, including property values, investment patterns, and market dynamics, with a specific focus on nominal housing prices across Latvia, Lithuania, and Estonia. Nominal housing prices are selected as a key factor due to their direct reflection of market demand, investor sentiment, and overall economic conditions, providing a robust indicator of the underlying dynamics shaping the real estate market in the Baltics. Employing a combination of statistical methods and economic models, the study examines the interplay between HICP fluctuations and the key indicator of the real estate market across Latvia, Lithuania, and Estonia. By providing empirical evidence and theoretical insights, this research contributes to a deeper understanding of the complex interactions between macroeconomic factors and real estate dynamics in the Baltic countries.