How macroeconomic factors impact residential real estate prices in Eastern Europe

Purpose - This study examines how GDP growth, interest rates, and unemployment rates influence residential real estate prices in politically and economically stable Eastern European countries, aiming to identify key drivers of property value changes in the region. Research methodology - The study uses multiple linear regression and Pearson correlation (r) to assess the relationship between variables and housing prices, with ARIMA (3,1,0) applied for short-term price forecasts based on cyclical time series trends. Findings - The findings show a strong correlation between macroeconomic indicators and residential real estate prices, with the key influencing factor varying by country, reflecting diverse market sensitivities and regional economic contexts. Research limitations - The research is limited to Eastern European countries with stable political and economic conditions, excluding those facing instability. Future studies could expand the analysis to include such regions to provide a more comprehensive view. Practical implications - The results provide valuable guidance for policymakers and investors in crafting strategies tailored to specific macroeconomic conditions, enhancing market predictions and stability. Originality/Value - By focusing on the underexplored residential real estate market in Eastern Europe, this study contributes novel insights into regional housing price determinants and offers a foundation for further research on macroeconomic impacts in real estate markets.