Identification of Regularities in Relation Between Prices on Primary and Secondary Housing Market in Selected Cities in Poland

Abstract

The purpose of this study is to identify regularities in the price relations between primary and secondary housing markets. The primary market and the secondary market are two related but quite differentiated sub-segments of the residential market. They particularly differ in the qualitative features of their traded objects and, consequently, also in the prices recorded in their trading. Nevertheless, they remain under the influence of the same main factors of a macroeconomic nature. This gives rise to the research hypothesis that prices of flats quoted in the sub-segments of the residential market remain in specific relationships with one another. In an attempt to verify this hypothesis, the paper presents the results of an analytical work on the search for regularities in the relationship between prices on primary and secondary housing markets in selected Polish cities. The regularities concern the dynamics and structure of price relation indices constructed for the research. They also include classification analyses. The findings of the research have revealed, inter alia, that in the majority of the cities under study, prices of flats in the primary markets are higher than prices in the secondary markets. However, situations in which the reverse happens periodically (sometimes occasionally) are not rare. The examined relations are not permanent and are subject to relatively large, irregular fluctuations over time. It is possible to distinguish groups of cities which are relatively similar in this respect, but these similarities are not strong.