Development of real estate prices in Prague (Vensim)

In progress

Name: Development of real estate prices in Prague

Author: Petr Netolický, netp02, 19.1.2021

Used tool: Vensim PLE 8.2.0

Problem definition

Every year, the price of real estate in Prague increases rapidly. As a result, young families can no longer afford to buy an apartment in the center of Prague, including a mortgage, and have to move to more educated villages and towns around Prague. The purpose of this simulation is to show trends and development of prices for flats, houses, and other real estates in Prague for next ten years based on real historical data available on the Czech statistical office. The aspectes which are taken into count are the influence of the investors, mortgage rates, population, lack of flats and others.

Method

The Vensim tool is used to simulate the problem. In this tool, it is possible to simulate the development of real estate in Prague over the next ten years.

Model

Variables

Population

Population of the Czech Republic. This is a data from September 30, 2020, initial value 10 707 839 [1]

Mortality

Initial value is based on data from Czech statistical office and it is set to 0,0105. [2]

Natality

Initial value is based on data from Czech statistical office and it is set to 0,0105.[3]

Emigration

This rate was calculated as emigrants / population. That is 21 300/10 707 839 = 0,002. [4]

Imigration

This rate was calculated as immigrants / population. That is 65 600/10 707 839 = 0,006. [5]

Population increase

Population growth in the Czech Republic. Calculated over the equation: Natality * Population * Immigration

Population decrease

Population decrease in the Czech Republic. Calculated over the equation: Mortality * Population * Emigration

Unemployment rate

Rate of unemployment people in Czech republic. It is in about 277 015 people, which is set to 0,038. [6]

Inflantion

The initial value of inflation was set on 0,03. [7]

GDP of Czech republic

Initial value is set to 0,95. [8]

Price of real estates

Initial value is set on 94 300 kč/m2. [9]

Price of real estates decrease

Mortages rates Fio bank with 5 year of fixation - 1,68 %. This value was set in simulation. [10] Quantitative easing

Lack of flats

Abudance of flats

Investors

Results