<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>There is a belief among investors that real estate is an excellent way to protect capital from depreciation due to inflation. Research does not provide a clear answer as to whether this investors’ belief is correct, but some approaches indicate that simple econometric methods are not able, especially in the short term, to clearly indicate the existence of a relationship between inflation and property prices (Fogler, 1984). The purpose of the study –was to find the relationship between residential real estate prices and inflation in the Polish economic conditions. Methodology of the study - the study used cointegration analysis with the Engle - Granger test. The research was carried out in the period from the first quarter of 2009 to the fourth quarter of 2021. The real estate hedonic indices calculated by NBP (National Bank of Poland) and the actual and forecasted inflation rates published by the GUS (Central Statistical Office) and the NBP (National Bank of Poland) were used in the research. The result - the analysis led to a negative verification of the research hypothesis, as it could not be proved that real estate prices were related to the level of inflation during the researched period. Originality/value - the study fills a gap in the Polish market regarding the analysis of the possibility of using real estate as a hedge against inflation. The research concerned only the Polish market, but this issue has not been taken up for years, also in mature economies.</p>
</abstract>

There is a belief among investors that real estate is an excellent way to protect capital from depreciation due to inflation. Research does not provide a clear answer as to whether this investors’ belief is correct, but some approaches indicate that simple econometric methods are not able, especially in the short term, to clearly indicate the existence of a relationship between inflation and property prices (Fogler, 1984). The purpose of the study –was to find the relationship between residential real estate prices and inflation in the Polish economic conditions. Methodology of the study - the study used cointegration analysis with the Engle - Granger test. The research was carried out in the period from the first quarter of 2009 to the fourth quarter of 2021. The real estate hedonic indices calculated by NBP (National Bank of Poland) and the actual and forecasted inflation rates published by the GUS (Central Statistical Office) and the NBP (National Bank of Poland) were used in the research. The result - the analysis led to a negative verification of the research hypothesis, as it could not be proved that real estate prices were related to the level of inflation during the researched period. Originality/value - the study fills a gap in the Polish market regarding the analysis of the possibility of using real estate as a hedge against inflation. The research concerned only the Polish market, but this issue has not been taken up for years, also in mature economies.

Residential Real Estate as a Potential Hedge of Capital Against Inflation

Real Estate Management and Valuation

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"Residential Real Estate as a Potential Hedge of Capital Against Inflation"}

There is a belief among investors that real estate is an excellent way to protect capital from depreciation due to inflation. Research does not provide a clear...

Residential Real Estate as a Potential Hedge of Capital Against Inflation

Published Online: Mar 10, 2023

Page range: 36 - 42

Received: May 02, 2022

Accepted: Jun 21, 2022

DOI: https://doi.org/10.2478/remav-2023-0004

Keywords
real estate market, inflation, cointegration test, inflation headging

© 2023 Rafal Wolski et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Residential Real Estate as a Potential Hedge of Capital Against Inflation

Published Online: Mar 10, 2023

Page range: 36 - 42

Received: May 02, 2022

Accepted: Jun 21, 2022

DOI: https://doi.org/10.2478/remav-2023-0004

Keywordsreal estate market, inflation, cointegration test, inflation headging

© 2023 Rafal Wolski et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
real estate market, inflation, cointegration test, inflation headging