Fundamental Economic Factors That Affect Housing Prices: Comparative Analysis between Kosovo and Slovenia

The purpose of this study is to provide strategic implications for real estate appraisers and real estate managers to know the economic determinants of housing price dynamics in Kosovo. The fundamental economic determinants of housing prices, adopted from previous studies, are Gross Domestic Product growth, demographics, real interest rates, and construction costs. The research methodology used is quantitative factor analysis. The main question addressed is, whether the conventional fundamental determinants of housing prices, such as Gross Domestic Product per capita, real interest rates, demographic factors, and construction costs have driven the observed housing prices in Kosovo. By sampling the determinants of housing prices in Kosovo, the study shows their effects on housing price dynamics. The study shows that housing prices in Kosovo are significantly determined by the underlying conventional fundamentals. This is the first research that tries to determine whether the fundamental economic factors influence the housing prices in Kosovo.