Similarity of Changes in Average Prices of Residential Properties in Europe in 2010-2016

The aim of the article was to assess the similarities of average price changes in the residential market in 34 European countries in 2010-2016. The first part of the study concerned tendencies of changes in average prices in residential markets in the studied countries, while the second part analyzed co-occurrence of changes in these countries in time. The study covered the period after the first wave of the financial crisis in Europe and took into account the second wave of crisis in several euro area countries. Price indices, trend functions, price ranges, linear correlation coefficients and shape similarity measure were utilized for conducting this study.

European countries, in general, differed with respect to changes in prices in the residential market. 12 countries were characterized by a trend of increasing price indices. 18 countries were classified as correcting countries, as during the studied period they were distinguished by a clear change in trend. Four countries with a downward trend during the study period were also identified. Furthermore, a differentiation between the countries was found due to the values of price ranges during the studied period. Studies of co-occurrence in time were conducted with the use of linear correlation coefficients mainly for groups of rising countries and falling countries. The study was conducted using measures of shape similarity, which allowed for an identification of converging, leading and following markets for some countries.