Real Estate Transactions and Household Wealth in Bulgaria – Stepwise Regression Model of Growth Factors (2020-2025)
Real Estate Transactions and Household Wealth in Bulgaria – Stepwise Regression Model of Growth Factors (2020-2025)

Author(s): Andrey Zahariev
Subject(s): Economy, National Economy
Published by: Институт за икономически изследвания при Българска академия на науките
Summary/Abstract: The real estate sector is closely related to economic growth. With Bulgaria's accession to the Schengen area and the Eurozone, the real estate sector reports a positive price dynamic of 75.6% for the period 1Q'2020-1Q'2025. This logically leads to a sustainable increase in household wealth. To identify trends in real estate transactions, a database with quarterly indices was constructed, through which the factors of price growth can be modelled by regression, which is the goal of the study. Thirty-one factors transformed into indices with a base of 100 at the beginning of 2020 were studied. By applying a stepwise regression model, 26 factors were eliminated and the five factors with the most significant impact on the dependent variable - the general housing price index were determined. In parallel with the "overheating" in the real estate market, the article establishes a negative correlation between the intensity of housing transactions registered with the Registry Agency and the general price index of residential properties purchased by households in Bulgaria.

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