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

<p>Low interest rates were introduced in the global economy to support the weak economic growth that followed the global financial crisis. In the real estate sector, low interest rates usually lead to a boom in investment and prices. This boom, however, is not spread throughout the economy, but rather concentrated in major cities. We demonstrate this phenomenon on the example of the office market in Warsaw (Poland). While it would be beneficial for the Polish economy to develop office space in smaller cities that have an insufficient supply of modern office space, investors have focused mainly on the capital. This has not only led to an increase in the cost of building land and construction, but has also pushed some relatively new existing office buildings off the market. We call such behaviour uncreative destruction and explain why it was possible.</p>
</abstract>

Low interest rates were introduced in the global economy to support the weak economic growth that followed the global financial crisis. In the real estate sector, low interest rates usually lead to a boom in investment and prices. This boom, however, is not spread throughout the economy, but rather concentrated in major cities. We demonstrate this phenomenon on the example of the office market in Warsaw (Poland). While it would be beneficial for the Polish economy to develop office space in smaller cities that have an insufficient supply of modern office space, investors have focused mainly on the capital. This has not only led to an increase in the cost of building land and construction, but has also pushed some relatively new existing office buildings off the market. We call such behaviour uncreative destruction and explain why it was possible.

Low Interest Rates and Uncreative Destruction in the Office Market

Real Estate Management and Valuation

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

{"article-title":"Low Interest Rates and Uncreative Destruction in the Office Market"}

Low interest rates were introduced in the global economy to support the weak economic growth that followed the global financial crisis. In the real estate...

Low Interest Rates and Uncreative Destruction in the Office Market

Published Online: Feb 20, 2024

Page range: 90 - 99

Received: Sep 25, 2023

Accepted: Feb 13, 2024

DOI: https://doi.org/10.2478/remav-2024-0018

Keywords
predatory competition, low interest rates, office market

© 2024 Krzysztof Olszewski et al., published by Sciendo

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

Low Interest Rates and Uncreative Destruction in the Office Market

Published Online: Feb 20, 2024

Page range: 90 - 99

Received: Sep 25, 2023

Accepted: Feb 13, 2024

DOI: https://doi.org/10.2478/remav-2024-0018

Keywordspredatory competition, low interest rates, office market

© 2024 Krzysztof Olszewski et al., published by Sciendo

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

Keywords
predatory competition, low interest rates, office market