| Abstract [eng] |
An asset bubble formation is one of the greatest risks to the property market. In order to prevent and estimate the start of bubble formation on time a detailed market analysis has to be done. High and irrational expectations of users who want to achieve the maximum result regardless of the information related to the various events in the market and factors influencing it are the main reason of the bubble formation. No source of literature depicts a single evaluation method or an indicator that could be universally applied to the all possible event scenarios in the different countries. For this reason, it is important to identify the bubble evaluation methods and indicators suitable to investigate the property market of Baltic countries. The main object of the research is the Baltic countries property market. The main objective of the research is to perform property market bubble evaluation in the Baltic countries with different models and indicators. The first part of the research analyses the reasons of property market bubble formation and problematic sectors are identified. Second part of the research investigates different types of the asset bubbles, factors that influence bubble formation, evaluation methods and indicators that are helping to identify the existence of such bubbles. In addition, user behaviour and expectations were analysed as expectations are one of the main reasons causing bubble formation. Results revealed that worldwide factors that contribute to the bubble formation are: gross domestic product; the number of properties; gross national disposable income; the price of stocks; level of inflation; wages; property interest standard; level of unemployment; household final consumption expenditure; rent price index; housing loans. Third part of the thesis consists of empiric research methodology that involves bubble evaluation methods and indicators: The method of fundamental factors influencing demand and supply; the method of existing value; the method of prices and income; indicator – the ratio of housing price and rent; indicator – GDP growing rate; indicator – ratio of housing loans and GDP; indicator – ratio of housing loans and total loans; indicator – property expenses. Empiric research is performed on the fourth part. It was established that the method of fundamental factors influencing the supply and demand is suitable to analyse the property bubble formation in the Baltic countries. The current value method usage in the Baltic countries is suitable only for the initial analysis. This method does not indicate the start, growth and burst of the bubble, only the fact that unstable situation was dominant in the analysed period of time was excluded. The method of prices and income is suitable to investigate the property market of Baltic countries as this method clearly revealed a sign of the bubble 2006-2009. It was found out that housing and rent price index ratio indicator is inaccurate when investigating the formation of housing price bubble in Lithuania and Estonia. Indicator recognised the signs of bubble formation in such periods where other methods or indicators could not. GDP indicator growth rate fluctuations can be linked not solely to the property market bubble formation, but to the various worldwide events too. It was discovered that housing loan and GDP ratio indicator is suitable to analyse property market of Baltic states. This indicator revealed a former historic bubble during which ratio level was the highest during the analysed period of time. It was found out, that housing loan and total loans ratio indicator is useful for using in Lithuanian and Latvian property markets. Housing loan and GDP ratio indicator is suitable to analyse property market in the Baltic countries. It should be pointed out, that signal of this indicator is rather outdated as ratio growth peak and fall was started to record 2008 – 2011. Research paper is concluded with conclusions and recommendations. |
