Modeling of the property market tendencies

Abstract

Probabilistic nature of the property market, irrational behavior of its members rise to random fluctuations. Taking into consideration this fact, we should say that the question methodology for modeling trends in the real estate market is relevant.

We have studied the principles of modeling methodology trends in the market. The first principle means taking into account the causation operation of the property both in macro and microsystems. The second principle involves modeling methodology trends in the property market, the so-called multilevel. It has been proved that the dynamic property price indexes which are functions of time may be the most versatile tools that reflect trends in the market. In the process of the analysts of  the real estate market it has been investigated that systematic separation of components in time series trend, seasonal and cyclical components is arbitrary. The polynomial approximations are recommended to use for building trend. It has been formulated the hypothesis of the existence of a trend that reflects the change in the general level of prices in the market. The dynamics of change in the average value of land and social housing in the city of Lviv are analysed. It is illustrated that the processes of change in the average value of land and average cost of social housing in different parts of the city have similar dynamics. There is a further gradual decline in prices. It has been calculated the index of yield speculative operations on the land, located in Lviv region and in the residential real estate of  Lviv. Index return of speculative transactions in the domestic real estate market is very low. Despite the significant increase in the index for 2015, in 2016 it is still negative. Amonf the main risk factors for adequate forecasting trends of the domestic real estate market we can distinguish the following ones: the political crisis in our country, unforeseen scenarios of Russia's military aggression against our country, additional financial and economic leverage that can be applied against Russia and Ukraine conflicting predictions about the state of the world market.