1. Real Estate Indicators
Ing. David Slavata, Ph.D.
VŠB-TU Ostrava
Faculty of Economics
Czech Republic

2. housing affordability measures housing debt measures
The basic indicators
housing affordability measures
housing debt measures
housing ownership and rent indicators
housing price indexes

3. Housing affordability
The indicator informs how affordable is the housing for families. It compares house prices with disposable incomes of families.
used for bank decisions in case of mortgages
Deposit to income ratio (minimum required downpayment for mortgage expressed in years of income)
DI = D/I
House price to income ratio
HI = HP/I
alternatively I/HP

5. Increase of bid wages from 1894 – 1922 Czechoslovakia

7. PI Ratio Index Ostrava

8. Housing Debt Measures
The indicator informs what is the share of housing debt to the value of the property or to the income
Housing debt to service ratio
HDS = (M + U + T) / I
Housing debt to equity ratio
HDE = MD / VP

9. Housing Debt to Income ratio Indexed Ostrava

10. Housing Ownership and Rent Indicators
Ownership ratio
OR = O / T
Price to earnings ratio
PE = HP / R – Ex
Price to rent ratio
PR = HP / R
Gross rental yield
GRY = R / HP

11. Gross Rental Yields in Regions
Cena za jednotku v tis Kč/m2
Měsíční nájem za jednotku kč/m2
Míra výnos v %
Praha, hl. m. Praha
77,
360, 5,
Středočeský kraj
34,
115,273743 3,
Jihočeský kraj
24,
84, 4,
Plzeňský kraj
36,
108, 3,
Karlovarský kraj
20,
83, 4,
Ústecký kraj
11,
86, 9,
Liberecký kraj
24,
138, 6,
Královéhradecký kraj
27,
137, 5,
Pardubický kraj
28,
146, 6,
Kraj Vysočina
24,
133, 6,
Jihomoravský kraj
46,
179, 4,
Olomoucký kraj
32,
133, 4,
Zlínský kraj
25,
168, 7,
Moravskoslezský kraj
18,
119,375 7,

12. Housing Price Indexes
Calculated from different quality sources. Samples:
Asking prices
Actual price paid
Rental prices
Price agreed at time of loan approval

13. Flat Asking Price Index Ostrava

14. Flat Asking Price Index and Asking Rent Index

15. SR Index

16. Basic Idea Discussion with students
Are the countries with a high share of homeownership richer?
Is rental housing suitable only for poor?
Should the governments support homeownership?
Housing policy of Great Britain of 90 ´s, USA 2008, Eastern Europe of 90 ´s

17. A. Oswald – The Housing Market and Europe´s Unemployment, 1999
Low level of employment mobility of families in home ownership
Low level of regional development due the ownership clubs, who restrict technical infrastructure development.

18. Does the unemployment affect the share of flats ready for rent?
Research questions
Is there any economical relationship between numbers of adverts in newspapers and economical and political events?
Does the unemployment affect the share of flats ready for rent?
Is it possible to estimate unemployment by changing the share of rental dwellings in the market

19. Advertisements Analysis
Lidové Noviny from –
312 newspapers
5000 adverts were recorded
Recalculated as average to avoid seasonal fluctuations
To avoid identical advertisements the duration between searched edition was two months
The adverts were sorted into homogenous groups

20. Genetic Code of the Real Estate Market – 51 years
CZECHOSLOVAK REPUBLIC
I WW
Emigrat.
G D
II WW
HABSBURG EMPIRE

21. Multiflat houses for sale Farmhouses for sale Family houses for sale
The main segments of real estate market in 20 ´s and 30´s in Czechoslovakia
Flats for rent
Multiflat houses for sale
Farmhouses for sale
Family houses for sale

23. Statistical estimation
Descriptive statistics
Pearson correlation coefficient
Ordinary least squares

25. Time shifts between unemployment and structure of housing market

27. Confirmation of Osvald's postulate: Employment mobility in rental sector is significantly sensitive, while the mobility in family housing segment is inconclusive.

28. New postulate: The share of rental sector predates future level of unemployment.

29. Explanation Maximization of tenant´s benefit
If the tenant loses his job and is not able to find comparable, he leaves current rented flat
He maximizes his benefit if the day when leaves rental flat is his last day to have job.
Notice period (for rental agreement and for job agreement) force tenants to start the negotiation in advance (contract economy – Holmstrom, Hart))
Maximization of landlord´s benefit
If he is informed in advance the tenant will release the flat, he offers flat for rent it does not matter if it is still occupied.