The Covid-19 Pandemic Effects on the Housing Market of the Northern and Pannonian Croatia

ABSTRACT

The COVID-19 pandemic has brought numerous changes to the various segments of the economy. After the unexpected initial shock of the pandemic in Croatia and the consequent lockdown in March 2020, there were some "black" predictions that stable and positive trends in the housing market in Croatia will be reversed. However, the stable growth of the housing prices on the national market has continued in 2020, as well as in 2021. In this paper, we analyse housing market trends of Northern and Pannonian Croatia. This part of Croatia includes all continental counties but excludes the City of Zagreb. In our analysis, we use data which cover the period from 2010 to 2021. Using the hedonic modeling analytic frame, we are assessing the effects of the COVID-19 pandemic, but also of some other market shocks on housing prices and the volume of transactions in the observed part of Croatia. Through the calculation of the hedonic index of asked and realized housing prices, we conclude that the housing prices in Northern and Pannonian Croatia have increased in the recent period Also, we did not find the evidence that the pandemic was statistically significant determinant of the housing price movements. However, the effect of the government's measure of subsidizing housing loans, which has been implemented in the last five observed years, could be assessed as statistically significant.