Event Title

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

This document is currently not available here.

Share

COinS
 
Oct 30th, 12:00 AM Oct 30th, 12:00 AM

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?