The Coming of Housing Bubble Burst in the Face of Emigration From Kosovo
Session
Management, Business and Economics
Description
Housing in Kosovo has always been the major life priority for the overwhelming majority of the families for two main reasons in sequence, as it is today: first, as a necessity, and second, as a perceived wealth to which many families spend their life lion’s share of incomes in reaching this objective. The devastating effect of the 1999 war which left many people homeless, reinforced the belief that rebuilding life implies, first of all, shelter to be accommodated into a house or an apartment while the rest of human activities were of secondary importance. Strong confidence persists that the real estate as buildings and homes is a guarantee for not letting you slide into poverty as the property can be sold and transformed into money. The experience from the US economy with the world’s largest share of immigrants proved that housing prices not only fall sharply but can collapse and cause severe financial crisis and depression. As a small emerging economy, Kosovo is experiencing a construction boom of apartment buildings beyond opportunities to fill them with the declining population. In this paradox between emigration and the construction boom, housing prices continue to remain relatively high despite the sales falling. This paper through empirical evidence aims at providing the answer to the critical question: how long this trend is likely to last, will it lead to the burst of a housing bubble and cause a financial crisis?
Keywords:
Kosovo, construction, asset pricing, housing bubble, financial crisis.
Proceedings Editor
Edmond Hajrizi
ISBN
978-9951-550-47-5
Location
UBT Kampus, Lipjan
Start Date
30-10-2021 12:00 AM
End Date
30-10-2021 12:00 AM
DOI
10.33107/ubt-ic.2021.498
Recommended Citation
Aliu, Florin and Mulaj, Isa, "The Coming of Housing Bubble Burst in the Face of Emigration From Kosovo" (2021). UBT International Conference. 521.
https://knowledgecenter.ubt-uni.net/conference/2021UBTIC/all-events/521
The Coming of Housing Bubble Burst in the Face of Emigration From Kosovo
UBT Kampus, Lipjan
Housing in Kosovo has always been the major life priority for the overwhelming majority of the families for two main reasons in sequence, as it is today: first, as a necessity, and second, as a perceived wealth to which many families spend their life lion’s share of incomes in reaching this objective. The devastating effect of the 1999 war which left many people homeless, reinforced the belief that rebuilding life implies, first of all, shelter to be accommodated into a house or an apartment while the rest of human activities were of secondary importance. Strong confidence persists that the real estate as buildings and homes is a guarantee for not letting you slide into poverty as the property can be sold and transformed into money. The experience from the US economy with the world’s largest share of immigrants proved that housing prices not only fall sharply but can collapse and cause severe financial crisis and depression. As a small emerging economy, Kosovo is experiencing a construction boom of apartment buildings beyond opportunities to fill them with the declining population. In this paradox between emigration and the construction boom, housing prices continue to remain relatively high despite the sales falling. This paper through empirical evidence aims at providing the answer to the critical question: how long this trend is likely to last, will it lead to the burst of a housing bubble and cause a financial crisis?