The CEE housing markets before, during and after the transition: An overview of property prices and home ownership rates

Ionascu, Elena A icle The CEE housing ma ke s be o e, du ing and a e he ansi ion: An o e iew o p ope y p ices and home owne ship a es CES Wo king Pape s P o ided in Coope a ion wi h: Cen e o Eu opean S udies, Alexand u Ioan Cuza Uni e si y Sugges ed Ci a ion: Ionascu, Elena (2017) : The CEE housing ma ke s be o e, du ing and a e he ansi ion: An o e iew o p ope y p ices and home owne ship a es, CES Wo king Pape s, ISSN 2067-7693, Alexand u Ioan Cuza Uni e si y o Iasi, Cen e o Eu opean S udies, Iasi, Vol. 9, Iss. 3, pp. 377-400 This Ve sion is a ailable a : h ps://hdl.handle.ne /10419/198516 S anda d-Nu zungsbedingungen: Die Dokumen e au EconS o dü en zu eigenen wissenscha lichen Zwecken und zum P i a geb auch gespeiche und kopie we den. Sie dü en die Dokumen e nich ü ö en liche ode komme zielle Zwecke e iel äl igen, ö en lich auss ellen, ö en lich zugänglich machen, e eiben ode ande wei ig nu zen. 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I he documen s ha e been made a ailable unde an Open Con en Licence (especially C ea i e Commons Licences), you may exe cise u he usage igh s as speci ied in he indica ed licence. h ps://c ea i ecommons.o g/licenses/by/4.0/ CES Wo king Pape s – Volume IX, Issue 3 377 This wo k is licensed unde a C ea i e Commons A ibu ion License The CEE housing ma ke s be o e, du ing and a e he ansi ion: an o e iew o p ope y p ices and home owne ship a es Elena IONAȘCU* Abs ac The pu pose o his esea ch is o in es iga e ele an economic aspec s, which cha ac e ized housing ma ke s om Cen al and Eas e n Eu opean (CEE) coun ies, o iden i y he ac o s which de e mine he house p ices and o ind he economic implica ions o p ope y in es men s, unde an in e na ional mic o and mac oeconomic en i onmen . Me hodological, he a icle uses he deduc ion and compa a i e analysis o collec ed s a is ical da a, and s a egic e o ms in pos -communis coun ies a e quali a i ely explo ed h ough con en analysis. In he case o CEE egion, undamen als de e minan s, such as eal income, eal in e es a e, demog aphic ac o s, play an ex emely impo an ole in explaining house p ice dis o ions. The p inciples o communis ideology added a special no e in he e olu ion o p ices, so he home owne ship a e, he housing quali y, he inancial housing sys em, Eu opean in eg a ion ep esen a numbe o adi ional ac o s wi h signi ican impac . Keywo ds: CEE coun ies, housing p ices, home owne ship, p i a iza ion In oduc ion The p ocess o ansi ion, embedded in he pa adigm o ansi ion om cen alized o ma ke economy, igge ed u bulence and angible adjus men s in he housing sys ems o he pos -socialis s a es. Despi e all his o ical and cul u al di e ences be ween s a es, he Cen al and Eas e n Eu ope (CEE) is o en pe cei ed as homogeneous due o he p esence o he ideology o socialis egimes being in powe (Tsenko a, 2009, p. 2). In he CEE, economic, poli ical and social es uc u ing, wi h democ a ic and capi alis o ien a ion, di ec ly a ec ed he housing sec o , emphasizing he signi ican di e ences o he way o applying he communis sys em, as he li ing condi ions om one coun y o ano he (Clapham e al., 1996). Thus, h ough he gene al p ocess o ansi ion om communism o democ acy, he pe o mance o he housing sec o e lec s he legacy o socialis p inciples and he poli ical app oach. These esul s lead o he e oca ion o a hypo hesis o di e gence in he de elopmen o esiden ial sys ems om Wes e n Eu ope and CEE, as well as in he g oup o pos - socialis s a es, since he heo ies o con e gence a e no enough adequa e in he concep ualiza ion o housing. *Elena IONAȘCU is PhD candida e a Alexand u Ioan Cuza Uni e si y, Iasi, Romania; e-mail: [email protected]. CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY Elena IONAȘCU 378 The majo economic e o ms implemen ed a he end o 1980s ou lined impo an s eps ela ed o he esiden ial domain by educing go e nmen con ol, subsidizing housing, and inc easing he quali y and guidance o esiden s in housing choices (Banks e al., 1996, p. 137). In he de elopmen o he p i a e esiden ial sec o , each coun y ac ed independen ly h ough he app oach o h ee main s a egies: decen aliza ion, p i a iza ion and en al e o m. Decen aliza ion in ol es he ans e o owne ship and inancial esponsibili ies o he s a e-owned housing s ock o local go e nmen s, wi h co esponding educ ions in he g an o cons uc ion, u ili ies and main enance g an s. The basic s a egy in de eloping e o ms is ep esen ed by housing p i a iza ion, by ans e ing s a e-owned p ope y igh s, o me enan s, unde ex emely a ou able condi ions (unde -ma ke p ices, minimum in e es a es, long- e m paymen s agna ion). The en al e o m consis s in he alloca ion o dwellings in he o m o en s, he es ablishmen o housing allowances, bu he diminishing he enan s’ igh s. The o ma ion o esiden ial ma ke s in he pos -communis coun ies was la gely co ela ed wi h p i a iza ion, which subsequen ly con ibu ed subs an ially o he inc ease o he home owne ship a e. The CEE coun ies explo ed in esea ch a e g ouped and analysed by pa icipa ion in Eu opean in eg a ion, hus ou lining he wo big g oups – membe coun ies o he EU and non-EU coun ies. To p o ide an o e iew p ojec ion abou esiden ial sec o ea u es om his Eu opean egion by iden i ying de e minan s ha in luence he e olu ion o housing p ices and home owne ship a es, i is oppo une o explo e, heo e ically and empi ically, he impac o e o ms p ac iced by he pos - communis coun ies in ansi ion p ocess on he economic, inancial and social en i onmen . Me hodological, esea ch pape analyses esiden ial ma ke speci ic in Cen al and Eas e n Eu ope, in e ms o housing p ice de elopmen s and home owne ship a es, h ough an adequa e me hodological iangula ion. The quan i a i e app oach supposes a gene al di ec ion ype posi i is – explana o y using me hods and echniques like deduc ion and compa a i e analysis o s a is ical da a ob ained o indica o s. Speci ic s a egic e o ms applied in pos -communis coun ies analysed is explo ed quali a i ely h ough a con en analysis o he li e a u e – coun y monog aphs on housing e o m, published epo s and esea ch pape s. In his con ex , he pape p o ides an o e iew, buil in a sys ema ic and desc ip i e way, on he e olu ion o esiden ial ma ke s in CEE coun ies, s a ing wi h he ansi ion om cen alized o he ma ke economy. The esul s o p e ious esea ch and he collec ed in o ma ion abou housing p ice ends and enu e s uc u e, in a c oss-coun y pe spec i e, allow he obse a ion o he complexi y and di e si y o he egion. The a icle co e s heo e ical aspec s in an in e p e a i e way, elying on a mix o he quan i a i e and he quali a i e app oach applied o he economic and social con ex o housing sys em. Theo y has become o esea ch pape s he deepes o m o exp ession CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY The CEE housing ma ke s be o e, du ing and a e he ansi ion 379 and de ini ion o he housing sec o . Jim Kemeny (1992) c i icized he empi ical app oach o eal es a e esea ch du ing he ansi ion pe iod, which was o e ly domina ed by poli ical conce ns. He hough ha a ype o his esea ch was no suppo ed by epis emological and on ological elemen s, isola ing social p oblems. A i s s ep in s uc u ing esea ch is he e iew o li e a u e in o de o iden i y he essen ial pape s suppo ing he g ea ideas ha de ine and desc ibe he ea u es o housing ma ke s in he eme ging coun ies o he CEE egion. The pe iod o communism occupa ion has le one o he p o ound and opp essi e ma ks on he o ganiza ion o he housing s ock, which has become a shadow o e he yea s, ollowing he o e all de elopmen o hese s a es. A gene al o e iew o his o ical, economic, social and cul u al e olu ion is ou lined in he second chap e , in o de o highligh he de ining aspec s o he ansi ion pe iod and he causes ha ha e pushed hese exponen ial changes. The CEE egion is cha ac e ized by a la ge numbe o home owne s, compa ed o Wes e n s a es, which p esen o much mo e di e si ied enu e s uc u e. In his con ex , he ime app oach o enu e concep explains he luc ua ions o hese housing o ganiza ion and alloca ion. The basis o hese o ms o owne ship is he way o assigning and acqui ing esiden ial p ope ies, ocusing in pa icula on p ice o en , which has led o he shaping o some dis o ions in economies. The con e gence and di e gence heo y is used o app ecia e he speci ic o he o ma ion and de elopmen o CEE esiden ial ma ke s, based on he p emise o he communis ideology and he esul s o he applicabili y o i s p inciples. 1. Li e a u e e iew: a his o ical and empi ical o e iew o housing ma ke in CEE coun ies The all o he Be lin Wall in 1989 ma ked he end o he communis egime and he beginning o he pe iod o ansi ion o he coun ies unde he socialis domina ion o democ acy and capi alism, becoming an ex emely exci ing subjec o esea che s. In he las 25 yea s, nume ous a icles ha e been published abou he ans o ma ion o he housing sys em in Cen al and Eas e n Eu ope. The i s s udies made, jus a e he end o he socialis sys em, concen a e on assessing he isible p og ess o housing e o ms applied in ansi ion economies, ocusing on housing s ock p i a iza ion, decen aliza ion o he esiden ial ma ke and es uc u ing he housing cons uc ion (Ba oss and S uyk, 1993; Hegedüs e al., 1996; Renaud, 1995; S uyk, 1996; Tosics and Mayo, 1996; Tu ne e al., 1992). O he esea ches, compa a i ely, explo e he applica ion o policy ins umen s in he con ex o he implemen a ion o a housing sys em o ien ed o he ma ke economy. Lux (2003) shows in e es in he economic and social e o ms de eloped in he public housing sec o . Clapham (1995) and Roland and Ve die (1994) analyse he e o m o p i a iza ion o li ing spaces, Hegedüs (2002), CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY Elena IONAȘCU 380 Renaud (1995), S uyk (2000) and UNECE (2005) examine he ways how o inance dwellings. Mos s udies ealized aim o su p ise he impo ance o he ansi ion p ocess by in es iga ing ends and ela ionships be ween changes in housing supply, he s uc u e o p ope y igh s and hei inancing. E en hough he e is a g ea di e si y in he de elopmen p ospec s o pos socialis coun ies, a consensus has been eached on indica o s o measu ing p og ess on es uc u ing esiden ial sys ems based on ma ke economy p inciples, de ined by in e na ional and na ional commi men s be ween public and p i a e ins i u ions. In 1990, he Uni ed Na ions Cen e o Human Se lemen s (UN-Habi a ) and he Wo ld Bank, wi h he suppo o he Uni ed S a es Agency o In e na ional De elopmen (USAID), ha e de eloped he Housing Indica o s P og am o p o ide an analy ical amewo k o assessing he pe o mance o he esiden ial sec o based on da a collec ed om 53 s a es on each con inen in di e en s ages o economic de elopmen (Hegedüs e al., 1996, p. 3). The se o desc ip i e elemen s o esiden ial ma ke s e e s o: o ms and p ope y igh s, housing p ices and accessibili y, quali y and quan i y, p oduc ion and in es men , inancing, g an ing sub en ions, policies and ins i u ional a angemen s. In li e a u e, we ind a ious combina ions o indica o s o assessing and e alua ing he pe o mance o esiden ial ma ke s, ocusing on e iciency and e ec i eness. The diagnosis, ma e ialized in a s udy ealized by Hegedüs e al. (1996), p o ides he i s quan i a i e and compa able esul s on he esiden ial ma ke pe o mance in CEE. The au ho s a gue ha he expe ience o he i s 4-5 yea s o ansi ion is mani es ed in he majo i y o coun ies by he de elopmen o highly decen alized housing sys ems and he c ea ion and applica ion o an in o ma i e sys em o assessing he sec o pe o mance based on a sys em o ele an indica o s a he egional le el, is ex emely necessa y (Hegedüs e al., 1996, p. 53). In 2001, Buckley and Tsenko a (2001, p. 7) de eloped a model o assessing poli ical e o ms and esiden ial ma ke pe o mance, aking in o accoun h ee o he mos impo an poli ical a eas a ec ing he housing sec o in e o ming he socialis economies, namely: iscal policy, inancial policy and eal es a e policy. Signi ican cons ain s o in o ma ion, limi ed da a on he housing sys em, he dynamic na u e o he ansi ion p ocess, combined wi h he di e ences be ween eal es a e ma ke ac ions and ela ed policies make di icul he complex analysis and in e p e a ion o he indica o s. The housing enu e s uc u e in he pos -communis coun ies has su e ed majo changes a e 1990. The sha e o en ed dwellings in he public domain has s ongly diminished, compensa ing by he inc easing he occupancy a e o he dwellings by he owne s (Hegedüs and Tosics, 1998; Lux, 2003; S uyk, 1996), he cause being he la ge-scale p i a iza ion and he p ope ies es i u ion o he o me enan s. La ge luc ua ions o he esiden ial p ope y p ices in de eloping Eu opean coun ies eco ded o e he pas wo decades ha e inc eased he in e es in analysing eal es a e ma ke de elopmen s. The empi ical li e a u e ega ding he dynamics o housing p ices in CEE coun ies is CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY The CEE housing ma ke s be o e, du ing and a e he ansi ion 381 limi ed, as compa ed o achie ed s udies conce ning he de eloped o de eloping coun ies om o he egions o he wo ld. Recen s udies p o ide an image, in empi ical da a, abou he de e minan s o p ices om he esiden ial ma ke s in CEE coun ies (Cia lone, 2015; Ége and Mihaljek, 2007; Hildeb and e al., 2012; Huynh-Olesen e al., 2013). The esea ch made by Ége and Mihaljek (2007) is he i s ha analyses he decisi e ac o s o housing p ice de elopmen s in he CEE egion, aking in o accoun besides he speci ic empi ical a iables, such as a ailable income, in e es a es, c edi o ms and demog aphic ac o s, and he speci ic ea u es o he ansi ion om he planned economy o he ma ke economy. The p ice dis o ions, he di e si y o enu e s uc u e and he di e en policy ou comes ha e led esea che s o app oach he con e gence and di e gence heo y in he analysis o esiden ial p ope y ma ke s. Hegedüs and S uyk (2005) ollow o app ecia e he o ms o inancing sec o in CEE coun ies by es ablishing he elemen s o di e gence and con e gence. The complexi y and in e na ionaliza ion o he economic en i onmen , he e olu ion o he mac oeconomic de e minan s jus i y he o ien a ion o he schola s owa ds he in eg a ed app oach o he analysed subjec (economically, socially and en i onmen ally) (Mi oniuc and Bed ule- G igo uță, 2007). The ansi ion om he planned o he ma ke economy has been an impo an p e equisi e o expanding housing s udies as an academic ield. The esea ch o house p ices de e minan s is limi ed o se e al empi ical s udies ha analyse he e ec o he con en ional undamen al de e minan s and some ansi ion speci ic ac o s. 2. The CEE housing ma ke s be o e and du ing he ansi ion The his o ical e olu ion o he housing sec o om he CEE coun ies was la gely de e mined by he “ ole o he sec o in he socialis o hodoxy o he egion – designa ed a he as a social han an economic” (Hegedüs e al., 1996), bu which, howe e , eques ed a signi ican demand o esou ces om he s a e, as housing was an eligible igh o all ci izens. The ansi ion o he ma ke economy was he main de elopmen goal o he 1990s, whe eas almos one hi d o he wo ld's popula ion li ed in he socialis coun ies, domina ed by cen alized planning, as well as he ac ha mos o hem ha e implemen ed ins i u ional e o ms and economical es uc u ings since 1989, abso bing la ge amoun s o esou ces o echnical, poli ical and social assis ance om he Eu opean Union, he USA, Canada, Japan and o he de eloped coun ies (Renaud, 1995, p. 35). The p ocess o de eloping and implemen ing economic e o ms is no a new aspec o he socialis economies be o e he collapse o he communis egime, as he his o y o hese coun ies is ma ked by nume ous a emp s o e i e he economy and o emedy he secula decline. The ansi ion CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY Elena IONAȘCU 382 p ocess o he housing sys em in CEE coun ies has been implemen ed in wo consecu i e phases, wi h a ocus on e o ming and es uc u ing. Fi s ly, he i s poli ical and egula o y changes since 1989 aimed he consolida ion o he ma ke o ces, by educing he s a e in e en ion and he p i a iza ion o public asse s. P i a iza ion in pos -socialis coun ies was achie ed h ough he sale o asse s, es i u ion and ans o ma ion o coope a i es in condominiums. The second phase o he ansi ion om he mid-1990s was mani es ed by “ ial and e o ”, due o excessi e concen a ion on he p oblems ha needed emedia ion and less on e ec i e s a egic in e en ions. Poli ical inc emen alism has e ol ed in o complex ela ionships, bu eauc acy and in e es g oups. “The p ac ical implemen a ion o housing e o ms in he di e en coun ies is di ec ly ela ed o he new di ec ions in housing policy, he p ocess o economic es uc u ing and he wide con ex o social and poli ical change” (Tsenko a, 2009, p. 65). Thus, a e 1989 he aims o he adop ed e o ms p o ed o be di e en ia ed, om one coun y o he o he , in esponse o he ansi ion o democ acy and ma ke economy. The s a es in ansi ion had o implemen mac oeconomic s abiliza ion p og ams, mic oeconomic libe aliza ion and, a he same ime, o be engaged in majo changes o he poli ical ins i u ions and economical sys em. In his si ua ion, adical e o ms had p o ed o be mo e e ec i e, unlike o hei g adual applica ion. Balce owicz (1994, p.52) de ines he shock- ype o adical ansi ion o he ma ke economy and he p i a e sys em as being a “ ansi ion whe eby all he cons i uen p ocesses a e implemen ed wi h hei maximum possible speed”, an example being Poland in he 1990-1991 yea s. This “shock he apy” o “big bang” o pos -communis ans o ma ion has a ec ed he e ec i eness o economic, poli ical and social de elopmen in a di e en way, and he i s nega i e e ec s ha e been el immedia ely. Wi h he limi a ion o s a e con ol, he e we e also in e up ions o ade ag eemen s be ween hese coun ies, which led o signi ican dec eases in p oduc ion. The ini ial libe aliza ion o p ices, a e decades o con ol, was e lec ed in he sha p inc ease o in la ion (Table 1). The ansi ion consequences om he cen alized economy o he ma ke economy we e ema ked in he ans e o esou ces be ween he economic sec o s, a ec ing, especially he ene ge ic sec o housing cons uc ion and he exploi a ion, due o he dis o ions c ea ed be ween he socialis p ices and he cu en ma ke p ices. The esiden ial sec o su e ed an ex emely se e e decline, as he s a e was domina ing h ough absolu e con ol he access o housing inance and land acquisi ion, he supply and p ice o building ma e ials. A b ie app ecia ion o he esiden ial sec o pe o mance du ing he communis and ansi ional pe iods, elied on he indica o sys em de eloped by Hegedüs e al. (1996) is p esen ed in Annex 1. This o m o p esen a ion pu s he ma ke economy p inciples in on o hose speci ic o he socialis economy, aking in o accoun he ollowing key a eas: • Housing enu e and p ope y igh s; CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY The CEE housing ma ke s be o e, du ing and a e he ansi ion 383 • Housing p ices and a o dabili y; • Housing quali y and quan i y; • P oduc ion and in es men ; • Finance; • Subsidies; • Policies and ins i u ional a angemen s. Table 1. In la ion a e in CEE coun ies, 1992 – 1996 1992 1993 1994 1995 1996 A menia 1241.2 10896.1 1884.5 32.1 5.8 Bela us 1557.8 1994.0 1959.5 244.2 39.1 Es onia 942.2 35.7 41.6 28.8 15.0 Geo gia 1178.5 7484.1 6473.6 57.4 13.9 La ia 958.2 34.8 26.2 23.3 13.2 Li huania 1162.5 188.8 45.0 35.5 13.1 Moldo a 2198.4 836.0 116.0 23.8 15.1 Russia … 841.6 202.7 131.4 21.8 Uk aine 2001.0 10155.0 401.1 181.4 39.7 A e age 1405.0 3607.3 1238.9 84.2 19.6 Median 1209.9 841.6 202.7 35.5 15.0 Sou ce: IMF (1997) The housing sys em in he CEE coun ies was di e en om ha in he Wes , de e mined by ex emely limi ed and egula ed enu e s uc u e and p ope y igh s, limi ed op ions in choosing he ype and loca ion o he dwelling, low mobili y and housing u no e , monopoly and ine iciency in he cons uc ion indus y, unde de eloped inancial ins i u ions and ins umen s, ine icien a ge ed subsidies, egula o y amewo k ha did no mee consume needs and en i onmen al sus ainabili y. 3. The concep and ole o enu e s uc u e in CEE coun ies Tenu e s uc u e a ies om one coun y o ano he , bo h h ough he way o de ining and egula ing legisla ion, and by he in luence o speci ic cul u al ac o s. The enu e concep de i es om he owne ship igh , o igina ed in eudal sys em, and which was subsequen ly aken o e by he housing ma ke egula ion policy, o dis inguish be ween he p ope ies occupied by he owne s and he enan s in he p i a e o public en i onmen (local au ho i y, associa ion o enan s). F om a ce ain pe spec i e, social phenomenon has ou lined he concep 's size, assigning i s p ac ices and ules, which we e la e ins i u ionalized as a guideline in he esiden ial sec o . The complexi y o his amewo k de ines he housing sec o h ough a h ee-dimensional ision - p ope ies a e assigned a mone a y alue ha can inc ease o dec ease, cons i u e consume goods ha a e used o mee needs CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY Elena IONAȘCU 384 and, inally, acqui e emo ional alue. Thus, as a whole, enu e s uc u e e e s o he legi imacy o how people ge possession o esiden ial homes as consume goods. Figu e 1. Housing enu e s uc u e in CEE coun ies Pe e Kemp (1987, p. 4) a gues ha he p ope y o ms mus be ega ded as a his o ical complex o igh s and obliga ions, “ he p ecise mix o which is liable o some impo an a ia ions, albei wi hin limi s”. The complex co e o igh s and du ies de ine he wo majo o ms o owne ship: home owne ship and en ing. Na ional his o y and speci ics gi e hem he de ining ea u es, bu by jux aposi ion, he wo o ms can be iewed in a gene al way. Unde he con ol o he communis egime, he igh o p i a e p ope y, acco ding o Ma x and Engel's aspi a ions, has become a common p ope y igh o social well-being. The endency owa ds decen aliza ion, p i a iza ion and libe aliza ion has emphasized he ansi ion om he cen alized economy o he ma ke economy o CEE coun ies. Policies ha we e applied in he esiden ial sec o , h ough social housing p ojec s in he public domain, in he o m o p i a iza ions o e unds, ha e been he measu es o he majo i y o Eu opean go e nmen s in ecen decades. The enu e s uc u e in pos -communis coun ies has unde gone majo changes since he 1990s, ma king he de ia ion om he command sys em in housing insu ance, h ough he eal es a e Sou ce: own ep esen a ion CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY The CEE housing ma ke s be o e, du ing and a e he ansi ion 391 o e c owding a e speci ic ac o s o ansi ion coun ies. These elemen s u he de ine he low quali y o li ing space in he o me socialis coun ies. The a e age o e c owding a e o he EU has inc eased om 19.5% in 2005 o 17.1% in 2013. The CEE coun ies ha e a la ge sha e o he o al popula ion li ing in o e c owded dwellings compa ed o he EU a e age. The a e age housing s ock in he EU inc eased in 2015 o 487 apa men s pe 1.000 inhabi an s, Poland ha ing he smalles s ock in ecen yea s (Figu e 6). E en hough he capaci y o he cons uc ion sec o has expanded la ely, a chi ec u al plans ha e been ine icien ly achie ed, causing u he p oblems o localiza ion. The concen a ion o he popula ion in u ban and a ac i e economic a eas leads o egional di e en ia ion, om an economic, social and cul u al poin o iew. Figu e 6. Dwellings pe 1.000 inhabi an s in CEE and EU selec ed coun ies Sou ce: New OECD A o dable Housing Da abase Ex e nal demand is in o m o o eign in es men s made by la ge eal es a e companies in CEE egion. Ex ending he mig a ion phenomenon om he Eas o Wes e n jobs gene a es a highe demand o housing by esiden s. A he beginning o he ansi ion, housing p ice misalignmen was highly dis o ed by he ini ial unde shoo ing, which was no co ec ed immedia ely. This caused e y low u no e in he eal es a e ma ke , while he home owne ship a e was e y high. 5. Di e gences and con e gences in housing ma ke s o Eu opean ansi ion coun ies The speci ic o he social housing sys em om Eu ope e e s o he social con lic s which we e caused by he u baniza ion in he 19 h cen u y, becoming a de e mina i e ac o a e he Fi s Wo ld Wa , due o he egula ions in oduced o he en s adminis a ion. The housing sec o has de eloped in acco dance wi h he poli ical and his o ical adi ions o he coun y. The o ma ion o he Eu opean 0 100 200 300 400 500 600 1990 2000 2010 2015 BG HU LT PL AT FR UK CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY Elena IONAȘCU 392 Union has highligh ed he aspec s ela ed o con e gence and di e gence, al hough housing doesn’ ep esen a de ini i e objec i e o he EU (Hegedüs, 2013, p. 3). The pos -socialis coun ies ha e gone h ough a adical p ocess o ansi ion, indica ing bo h con e gence and di e gence, due o he communis ideology ha has domina ed mo e decades. Looking back, he p i a iza ion didn’ ep esen a e o m o a pe spec i e de elopmen , bu a way o ex ending he socialis ideology in he 1990s h ough he elabo a ed policies o suppo he housing s ock, which had i e ocable consequences o he pu chasing beha iou o he popula ion. Thus, he housing owne has become a “social no m” in he p i a iza ion ap, which has con ibu ed o he o ma ion o a homogeneous housing sys em (Lux and Sunega, 2014). The di e gences be ween ansi ion policies om he planned economy o he ma ke economy ha e me ged in o a con e gence o all esiden ial sys ems. The di ec ion o o ien a ion was he same in all pos -socialis coun ies, bu he design and he implemen a ion o e o ms led o di e en esul s, which ou line he di e gence o eali y. As a esul , con e gence is no he mos app op ia e de ini ion o he concep ualiza ion o pos -communis sys ems, he di e ences in e e ing in he di e gen scena io o he u u e de elopmen . Figu e 7. House p ices and mac oeconomic undamen als o CEE coun ies be o e, du ing and a e c isis pe iod Sou ce: EMF Hypos a 2003 – 2016; Na ional sou ces, BIS Residen ial P ope y P ice da abase, h p://www.bis.o g/s a is ics/pp.h m No e: NHP, % - change in nominal house p ices; RIR, % - ep esen a i e in e es a es on new esiden ial loans; GDP, % - GDP pe capi a g ow h (annual %). The speci ic di e si y o he CEE egion con ibu es o he complexi y o esiden ial p ope y p ice de elopmen s. Figu e 7 shows he housing p ice e olu ions in se e al CEE coun ies de e mined by he in luence o GDP and by he ep esen a i e in e es a e o he new esiden ial loans g an ed, be o e, du ing and a e he economic and inancial c isis. The e olu ions o hese indica o s luc ua e 0 5 10 15 20 25 30 35 40 45 BG CZ EE HU LV LT HR RU UA 2001 - 2007 p e-c isis pe iod NHP, % RIR, % GDP, % -50 -40 -30 -20 -10 0 10 20 30 BG CZ EE HU LV LT HR RU UA 2008 - 2010 c isis pe iod NHP, % RIR, % GDP, % -10 -5 0 5 10 15 20 25 30 BG CZ EE HU LV LT HR RU UA 2011 - 2015 pos -c isis pe iod NHP, % RIR, % GDP, % CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY The CEE housing ma ke s be o e, du ing and a e he ansi ion 393 di e en ly in each o hese analysed coun ies. The undamen al di e ences ela ed o economic ac i i ies, he employmen oppo uni ies, he income le els and he demog aphic s uc u e highligh he di e gences ha appea ed in p ice luc ua ions be ween u ban and u al egions. The policy o he communis egime has p o ided he eloca ion o he popula ion in indus ialized a eas ha s imula ed u baniza ion (Palacin and Shelbu ne, 2005). Decen aliza ion, which has allowed egional au ho i ies o implemen di e en policies, he sho age o anspa ency in ansac ions, he poo de elopmen o legisla ion on he planning, egis a ion and execu ion o eal es a e con ac s - all o which ha e caused dis o ions a he p ice le el and ha e inc eased he owne s’ numbe . Figu e 8. Home owne ship in selec ed Eu opean coun ies, 2015 Sou ce: Eu os a , OECD The CEE coun ies a e cha ac e ized by high a es o occupa ion o esiden ial p ope y by owne s compa ed o en al a es (Figu e 10). The o icial da a p o ided by Eu os a e lec s he ac ha he coun ies wi h a lowe GDP pe capi a ha e he la ges sha e o home owne ship in all o ms o owne ship. The main cause, which explains his phenomenon, is due o mass p i a iza ion in 1990, which has ans e ed he public sec o housing o he p i a e sec o . The implemen a ion o his e o m was a way o o se he ex emely low wages om he socialis pe iod, bu also as an “abso ben o social shocks, imp o ing he high unemploymen and lessening he cos s suppo ed by he socie y du ing he ansi ion pe iod” (Augus yniak e al., 2013). I is impo an o men ion ha he pe cen age o o e 90% o he employmen a e also con ains some misunde s andings, aking in o accoun ha he e a e a la ge numbe o people who li e uno icially in en ed apa men s in u ban a eas wi h a high economic po en ial, con inuing o be egis e ed as esiden s in hei amily homes. 0 20 40 60 80 100 120 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% BE BG CZ DK DE EE IE GR ES FR HR IT CY LV LT LU HUMT NL AT PL PT RO SI SK FI SE UK IS NOMK RS EU GDP pe capi a Tenu e s uc u e (%) Owne -occupancy Ren ing GDP pe capi a (cu en US$) CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY Elena IONAȘCU 394 Conclusions The pu pose o his esea ch is o in es iga e ele an economic aspec s, which cha ac e ized housing ma ke s om Cen al and Eas e n Eu opean (CEE) coun ies, o iden i y he ac o s which de e mine he house p ices and o ind he economic implica ions o p ope y in es men s, unde an in e na ionalized mic o and mac oeconomic en i onmen . Residen ial ma ke analysis om CEE coun ies is pe o med based on he essen ial conside a ions: ansi ion om a planned economy o a ma ke economy h ough de egula ion, p i a iza ion and inancial s abiliza ion, and pa icipa ion o he Eu opean in eg a ion p ocess. Fo ma ion housing ma ke s in pos -communis coun ies was linked wi h p i a iza ion in 1990s, which la e signi ican ly inc eased he home owne ship a e, unlike o he Eu opean coun ies, which a e mo e o ien ed owa ds dwelling en . In he ansi ion yea s o he ma ke economy, he high a e o home owne ship was de e mined by s a e’s in ol emen h ough he e o ms ha we e adop ed, bu wi h he de elopmen and in eg a ion o hese s a es in he Eu opean con ex , ma ke p ices led he esiden ial p ope y sys em. A e p i a iza ion, housing p ices we e below he ma ke , and hen economic de elopmen has o ien ed households o highe income o housing acquisi ion. Recen mac oeconomic s udies claim ha he main sou ce o household weal h is ep esen ed by esiden ial p ope y and mo gage loans cons i u e he main o m o le e age. O he esea ches no ice ha housing demand is sensi i e o popula ion income and o ma ke p ices, and ha housing o e is elas ic in he long un. A e mo e han 25 yea s o change o he communis egime, he mos CEE eme ging coun ies ha e no de eloped and implemen ed e icien housing und inancing and managemen sys ems, as he esiden ial sec o has g own as a consequence o he economic ansi ion and no as a na u al de elopmen o economy. In he es uc u ing p ocess, he adop ed policies such as p i a iza ion, decen aliza ion, banking e o ms ha e se ed as “shock abso ben s” o economic shocks and less as s a egies o de eloping an example o a esiden ial sys em. All hese adical s a e in e en ions ha e pola ized he egion wi h a se o p i a e p ope y ha was de e mined by low incomes. The image inconsis ency ansmi ed by he mixed socie y in e e es wi h elemen s o di e gence in all a eas o he economic sys em. The inhe en limi a ions o a ho oughly s udy a he le el o he CEE coun ies which a e no membe s o he EU we e due o he lack o o icial da a. Housing s a is ics om pos -communis coun ies a e no su icien ly de eloped o e lec eali y, wi h some insigni ican de ia ions, being necessa y a ha moniza ion and no maliza ion o he calcula ion and egis a ion me hodology, a leas a Eu opean le el. The con inui y o esea ch in o he analysis o esiden ial p ope y p ice CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY The CEE housing ma ke s be o e, du ing and a e he ansi ion 395 de elopmen s and he di e si y o enu e s uc u e h ough a compa a i e app oach among CEE coun ies consis s in he de elopmen o an econome ical model ha will empi ically suppo he esul s and co ela ions es ablished be ween he undamen als. Con inuing esea ch o esiden ial p ope y p ices and p ope y owne ship di e si ica ion, h ough a compa a i e app oach among CEE coun ies, consis s o de eloping an econome ic model ha empi ically suppo s he esul s and co ela ions es ablished be ween undamen als. Re e ences Aalbe s, M (2012), P i a isa ion o social housing, in: Smi h, S. (eds.), In e na ional Encyclopedia o Housing and Home, Ams e dam: Else ie , pp. 433-438. Augus yniak, H., Łaszek, J., Olszewski, K. and Waszczuk, J. (2013), To Ren o o Buy – Analysis o Housing Tenu e Choice De e mined by Housing Policy, Ekonomia Jou nal, 33, pp. 31-54. Balce owicz, L. (1994), Economic ansi ion in Cen al and Eas e n Eu ope: compa isons and lessons, The Aus alian Economic Re iew, 27(1), pp. 47-59. Banks, C., O'Lea y, S. and Rabenho s , C. (1996), P i a ized housing and he de elopmen o condominiums in Cen al and Eas e n Eu ope: The cases o Poland, Hunga y, Slo akia, and Romania, Re iew o U ban & Regional De elopmen S udies, 8(2), pp. 137-155. Ba oss, P. and S uyk, R. (1993), Housing ansi ion in Eas e n Eu ope: p og ess and p oblems. Ci ies, 10(3), pp. 179-188. Buckley, R. M. and Tsenko a, S. (2001), Housing ma ke sys ems in e o ming socialis economies: Compa a i e indica o s o pe o mance and policy, In e na ional Jou nal o Housing Policy, 1(2), pp. 257-289. Cia lone, A. (2015), House p ice cycles in eme ging economies, S udies in Economics and Finance, 32(1), pp. 17-52. Clapham, D. (1995), P i a isa ion and he Eas Eu opean Housing Model, U ban S udies, 32(4-5), pp. 679-694. Clapham, D., Hegedüs, J., Kin ea, K., Tosics, I. and Kay, H. (1996), Housing p i a iza ion in Eas e n Eu ope. Wes po : G eenwood P ess. Ége , B. and Mihaljek, D. (2007), De e minan s o house p ices in Cen al and Eas e n Eu ope. Compa a i e Economic S udies, 49(3), pp. 367-388. CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY Elena IONAȘCU 396 Glind o, E. T., Subhanij, T., Sze o, J. and Zhu, H. (2011), De e minan s o house p ices in nine Asia- Paci ic economies, In e na ional Jou nal o Cen al Banking, 7(3), pp. 163-204. Hegedüs, J. (2002). Housing inance in Sou h Eas e n Eu ope. e ie ed om h p://pdc.ceu.hu/a chi e/00005330/ Hegedüs, J. (2013), The ans o ma ion o he social housing sec o in Eas e n Eu ope. A concep ual amewo k, in Hegedüs, J. and Lux, M.T. (eds.), Social housing in ansi ion coun ies, New Yo k: Rou ledge, pp. 1-29. Hegedüs, J. and S uyk, R. (2005), Di e gences and con e gences in es uc u ing housing inance in ansi ion coun ies, in: Hegedüs, J. and S uyk, R. (eds.), Housing inance: New and old models in Cen al Eu ope, Russia and Kazakhs an, Budapes : Open Socie y Ins i u e, pp. 3-39. Hegedüs, J. and Tosics, I. (1998), Ren e o m - Issues o he coun ies o Eas e n Eu ope and he Newly Independen S a es, Housing S udies, 13(5), pp. 657-678. Hegedüs, J., Tosics, I. and Mayo, S. (1996), T ansi ion o he housing sec o in he Eas Cen al Eu opean coun ies, Re iew o U ban & Regional De elopmen S udies, 8(2), pp. 101-136. Hildeb and , A., Ma in, R., S eine , K. and Wagne , K. (2012), Residen ial p ope y ma ke s in CESEE EU Membe S a es, Focus on Eu opean Economic In eg a ion, (1), pp. 8-30. Huynh-Olesen, D. T., S eine , K., Hildeb and , A., and Wagne , K. (2013), Residen ial p ope y p ices in Cen al, Eas e n and Sou heas e n Eu opean coun ies: The ole o undamen als and ansi ion- speci ic ac o s, Focus on Eu opean Economic In eg a ion, (2), pp. 52-76. Kemeny, J. (1992), Housing and Social Theo y, New Yo k: Rou ledge. Kemp, P. (1987), Some aspec s o housing consump ion in la e nine een h cen u y England and Wales, Housing S udies, 2(1), pp. 3-16. Lux, M. (2003), Public housing policies: Economic and social pe speci es, in: Lux, M.T. (eds.), Housing policy: An end o a new beginning?, Budapes : Open Socie y Ins i u e, pp. 5-43. Lux, M. and Sunega, P. (2014), Public housing in he pos -socialis s a es o Cen al and Eas e n Eu ope: Decline and an open u u e, Housing S udies, 29(4), pp. 501-519. Mi oniuc, M. and Bed ule-G igo uță, M. V. (2007), Pe o mance in he economical and inancial communica ion o he en i y: Cogni i e po en ial and limi a ions, Con e ence In e na ionale, A la Reche che de la Pe o mance: Un Concep de Ges ionnai e Essen iel à l'En ep ise, B es , F ance, 1-2 Feb ua y, e ie ed om h ps://pape s.ss n.com/sol3/pape s.c m?abs ac _id=965107 Muellbaue , J. (2012), Housing and he mac oeconomy, in: Smi h, S.J. (eds.), In e na ional encyclopedia o housing and home, Ams e dam: Else ie , pp. 301-314. CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY The CEE housing ma ke s be o e, du ing and a e he ansi ion 397 Palacin, J. and Shelbu ne, R. C. (2005), The p i a e housing ma ke in Eas e n Eu ope and he CIS, UNECE Discussion Pape s, No. 6, UNECE Publishing, Gene a, e ie ed om h ps://pape s.ss n.com/sol3/pape s.c m?abs ac _id=903119 Renaud, B. (1991), Housing e o m in socialis economies, Wo ld Bank Discussion Pape s, No. 125, The Wo ld Bank Publishing, Washing on, e ie ed om h p://documen s.wo ldbank.o g /cu a ed/en/980131468740381763/Housing- e o m-in-socialis -economies Renaud, B. M. (1995), Housing inance in ansi ion economies: he ea ly yea s in Eas e n Eu ope and he Fo me So ie Union, Housing Finance In e na ional Jou nal, pp. 35-46. Roland, G. and Ve die , T. (1994), P i a iza ion in Eas e n Eu ope. I e e sibili y and c i ical mass e ec s, Jou nal o Public Economics, 54, pp. 161-183. S uyk, R. J. (1996), Economic es uc u ing o he Fo me So ie Bloc: The case o housing, Washingon: The U ban Ins i u e P ess. S uyk, R. J. (1996), The long oad o he ma ke , in: S uyk, R. J. (eds.), Economic es uc u ing o he o me So ie Bloc: The case o housing, Washing on: The U ban Ins iu e P ess, pp. 1-59. S uyk, R. J. (2000), Homeowne ship and housing inance policy in he o me So ie Bloc: Cos ly populism, Washingon: The U ban Ins i u e P ess. Tsenko a, S. (2006), Housing policy and housing ma ke s in Sou h Eas Eu ope: Na ions o homeowne s, ENHR Con e ence, Ljubliana, Slo enia, 2-5 July, e ie ed om h ps://www.enh .ne /documen s/2006%20Slo enia/W01_Tsenko a.pd Tsenko a, S. (2009), Housing Policy Re o ms in Pos -Socialis Eu ope. Los in T ansi ion, Heidelbe g: Physica-Ve lag. Tsenko a, S. (2012), House building indus ies: Pos -socialis, in: S. J. Smi h, S. J. (eds.), In e na ional Encyclopedia o Housing and Home, Ams e dam: Else ie , pp. 203-210. Tu ne , B., Hegedüs, J. and Tosics, I. (1992), The e o m o housing in Eas e n Eu ope and he So ie Union, London: Rou ledge. UNECE. (2005). Housing inance sys ems o coun ies in ansi ion. P inceples and Examples, New Yo k and Gene a: Uni ed Na ions. Yem so , R. (2007), Housing p i a iza ion and household weal h in ansi ion, WIDER Wo king Pape s, No. 02, UNU-WIDER Publishing, Helsinki, e ie ed om h ps://www.wide .unu.edu/ si es/de aul / iles/ p2007-02.pd CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY Elena IONAȘCU 398 Annex 1 Annex 1 p esen s, in compa ison o he 1990s and 2000s, he s uc u e o home owne ship in he CEE coun ies acco ding o EU. Table A1. Change o he enu e s uc u e in CEE Coun ies – EU Membe s Sou ce: Eu os a ; (Hegedüs e al., 2013) CEE Coun ies - UE Membe s Yea Public en al Coope a i e P i a e en al Owne occupied O he Bulga ia 1990 6.6 1.5 91.7 0.2 2001 3.0 1.9 94.6 0.5 C oa ia 1990 24.0 3.5 67.5 5.0 2001 2.9 10.8 82.9 3.4 Czech Republic 1990 39.1 20.4 40.5 2001 29.0 17.4 6.7 46.9 Es onia 1990 61.0 4.0 35.0 2001 5.2 94.8 Hunga y 1990 23.0 3.0 74.0 2001 4.0 4.0 91.0 1.0 La ia 1990 59.0 5.0 36.0 2001 16.0 2.0 82.0 Li huania 1990 60.8 39.2 2001 2.4 94.5 3.1 Poland 1990 31.6 25.4 43.0 2001 16.1 28.6 55.3 Romania 1990 32.7 67.3 2001 2.7 1.1 96.2 0.0 Slo akia 1990 27.7 22.1 50.2 2001 6.5 15.6 4.1 73.8 Slo enia 1990 31.0 1.0 68.0 2001 3.0 7.0 82.0 8.0 CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY The CEE housing ma ke s be o e, du ing and a e he ansi ion 399 Table A2. Change o he enu e s uc u e in CEE Coun ies – Non-EU Membe s CEE Coun ies – Non-UE Membe s Yea Public en al Co-ope a i e P i a e en al Owne occupied O he Albania 1990 35.50 64.50 2001 1.00 5.00 94.00 A menia 1990 49.00 51.00 2001 3.90 96.00 0.10 Bela us 1995 32.10 5.30 62.60 2001 19.70 4.70 74.80 0.80 Republic o Moldo a 1990 21.00 79.00 2001 Russia 1990 67.00 4.00 26.00 3.00 2001 29.00 66.00 5.00 Se bia 1990 23.00 3.00 64.00 10.00 2001 2.60 4.40 81.60 11.40 Uk aine 1990 47.30 52.70 2001 20.00 80.00 Sou ce: Eu os a , (Hegedüs e al., 2013); UNECE; Na ional S a is ical Commi ee o he Republic Bela us, Na ional Bu eau o S a is ics o he Republic o Moldo a CES Wo king Pape s | 2017 - olume IX(3) | wwww.ceswp.uaic. o | ISSN: 2067 - 7693 | CC BY Elena IONAȘCU 400 Annex 2. T ansi ion in he housing sys em in CEE coun ies Socialis sys em Ma ke -based sys em Be o e he ansi ion Du ing and a e he ansi ion Housing enu e and p ope y igh s  p ope y igh s wi hd awn;  social and public housing domina e u ban a eas.  signi ican inc eases in home owne ship a e o p i a e dwellings a e mass p i a isa ion and p ocess o es i u ion o o me owne s. Housing p ices and a o dabili y  con olled and uni o m p ices;  c i e ia o housing alloca ion acco ding o he socialis adminis a i e me hod;  housing sho age e ec .  de elopmen o he inancing sys em;  he p ice explosion due o a poo ly de eloped ins i u ional amewo k;  he p ice e lec s he loca ion, size, quali y and ype o dwelling;  adjus ing public en s. Housing quan i y and quali y  housing condi ions a e de ined by inadequacy, o e c owding and limi ed access o u ili ies;  bigge and less c owded housing in u al a eas, bu o al lack o u ili y acili ies, unlike u ban a eas.  s a e policies o ien ed o de elopmen and expansion o pe iphe al egions o u ban a eas wi h an e ec on popula ion densi y;  inc ease li ing s anda ds and housing quali y. P oduc ion and in es men  mos u ban dwellings a e buil by s a e en e p ises acco ding o p ede ined s anda ds;  he le el o esiden ial in es men as pe cen age o GDP is e y low.  he p esence o p i a e cons uc ion companies;  eal es a e de elope s and amilies a e di ec ed o esiden ial complex, aking in o accoun he amoun o income. Finance  home loans a e g an ed wi h low ixed in e es a es and on long- e m, alloca ed by s a e-owned banks, which a e no colla e al based.  loans o housing inancing a e g an ed by comme cial banks;  high in e es a es a e p ac iced, which causes declining demand o bank loans. Subsidies  egula ed and uni o m subsidies o housing and main enance;  social en als did no adjus and did no eco e housing cos s.  he subsidies a e only g an ed, unde ce ain condi ions, o mo gage loans. Policies and ins i u ional a angemen s  sup eme s a e con ol, acco ding o cen alized planning.  ma ke o ien ed e o ms. Sou ce: own ep esen a ion, adop ed by The pe o mance o he Eas Eu opean Housing Model (Hegedüs e al., 1996)