Increased attention is paid in the last several years to monitoring the real estate market
developments, due to their significant impact on the economic developments in general. In view
of that, the importance of regular monitoring of apartment prices is especially emphasized.
Namely, housing real estate makes a significant part of the total assets of the population, and
expenditures pertaining to these assets (housing loan or rent payments) make a great portion of
the total population’s expenditures. Fluctuations in apartment prices, rents, and housing loan
interest rates, therefore, greatly impact the change of real estate value, as well as the
population’s income and expenditures, and consequently the changes in aggregate demand and
inflation. Home prices are sensitive to interest rate changes, i.e. to the expansion or restriction
rate of the monetary policy, with which they can significantly participate in functioning of the
transmission mechanism of the monetary policy. Rent prices also are a part of the Personal
Consumption Expenditure (PCE), which is a basis for calculation of the Consumer Price Index
(CPI), thus influencing the inflation movements. In more developed economies, more prominent
fluctuations in home prices can also impact the financial and economic cycle and the financial
stability of the country.