Macro-Economic Convergence. Property sector growth in Prague Essay

Macro-Economic Convergence. Property sector growth in Prague - Essay Example 63). The substance of this study is based on the premise that real estate development as an aspect of economic growth depends significantly on the nature and direction of financial development. This study will seek to demonstrate that seasons of favourable financial developments have tended to correspond to with seasons of a rise in the values of residential properties in the country. The study will also seek to illustrate the fact that inflationary pressure and other financial forces on the market have a tremendous effect on the level of economic development as represented in the value of property prices in the country. The study will use illustration of the performance of property values in the country within the period of ten years. Basically, this study will be qualitative in approach. It will combine the methods of extended literature and case study approach to determine the insights of the study with particular reference on the impact of financial developments on economic growt h in the Czech Republic. Reliable and resourceful information on the financial trends in the Czech Republic will be matched to the nature of real estate development in order to establish the kind of associations between the two (Haber, North & Weingast, 2007). In order to enrich the authenticity of the study, it will be appropriate to use the most recent information for the study. Case analyses will be conducted to determine the manner in, which the financial trends in the Czech Republic impact on the aspect of economic growth (Liebscher, 2006). The trends of the values on the property markets suggest that macro-economic forces at play in the country have some significant impacts on the property development in the country. Furthermore, the study will incorporate the views of analysts in order to establish the nature of relationships that operate between the two realities. There is a sense in which the dynamics of economic growth and the trends in the interest rates affect the level of property development in the Czech Republic (Ranciere & Loayza, 2005). Generally, the study will seek to demonstrate the fact that the nature of growth and the levels of stability of the markets determine economic processes. Past and recent case analyses, economic development studies, media reports and other multiple sources have shown compelling proof of a boom in the residential property sector in the space of time of a decade in Czech Republic (Ranciere & Loayza, 2005). Various explanations from different sources have offered a range of explanations behind this development. In the opinion of analysts and industry experts, the phenomenal growth of the residential property sub-sector has impacted significantly on the property values in the country. The various sources are in concurrence with the fact that Prague remains the focal point of residential property development in the country. Few studies have attempted to determine the exact impact of the phenomenal growth in the resid ential property sub-sector on the value of properties in Prague (Ranciere & Loayza, 2005). However, a review of select cases indicates a consistent growth in the value of residential property prices over the past five years. Analyses of various cases have shown up to 500 percent increase in the value of residential properties in a span of a few years (Florio, 2011, p. 78). Whereas some analysts predict a consistent pattern of value increment in Prague’s property sector, others remain pessimistic expressing fears and doubts over the sustainability of the current value growth rates. Those who project a decline in the value