Correlation of economic development of countries with the potential of their housing real estate markets : a case study in the European Union

Abstract

Purpose: The aim of the research is to examine the correlation between economic development in the macroeconomic scale and the development of the real estate market. Design/Methodology/Approach: The tool of the applied computational engineering is cluster analysis, the hierarchical method based on Euclidean distance and Ward’s method (algorithm). Findings: The research process carried out confirmed the existence of a dependence between macroeconomic determinants and parameters of the real estate market. A division into three homogeneous groups of countries, whose development shows signs of similarity, was obtained. This allows making comparisons between individual countries, neglecting their geographical and historical dependences. Practical Implications: The utilitarian usability of applying computational tools used in economic analyses was proved. Originality/Value: Individual clusters make a certain reference point for particular countries. The obtained results offer the possibility of applying a suitable strategy which provides bases for development and also the possibility of verifying its effects against a whole group.