The impact of macroeconomic shocks on real estate prices in the Czech Republic and Austria

The aim of this bachelor thesis is to evaluate the impacts of macroeconomic shocks on the development of residential real estate prices in the Czech Republic and Austria between 2008 and 2024, and to identify differences in the sensitivity of both markets to selected economic variables. The theoretical part draws on insights into the business cycle, the functioning of the real estate market, and transmission mechanisms of macroeconomic shocks. It also includes a description of institutional differences between the two countries, particularly regarding rent regulation and housing structure. The empirical part applies regression analysis using quarterly data from 2008 to 2024. Three linear models – for the Czech Republic, Austria, and a joint model – are used to quantify the effects of variables such as interest rates, inflation, unemployment, and GDP dynamics. The results show that the Czech market exhibits greater sensitivity to changes in the economic cycle and the unemployment rate, while the Austrian market responds more strongly to changes in interest rates and inflation. Although the joint model confirmed a positive coefficient for the variable capturing the presence of rent regulation in Austria, this relationship was not statistically significant. This suggests that the differences between the two markets are likely the result of a combination of multiple factors rather than the effect of regulation alone. The thesis thus provides a detailed quantitative comparison of the two markets and demonstrates that the institutional environment, the economic cycle, and macroeconomic conditions jointly shape the dynamics of residential property prices.