Real estate derivatives as financial instrument – possibility prospects of usage in Poland


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The article refers to the theoretical framework of the possibility of using real estate derivatives in the Polish financial market. Although the Polish property market is well developed, and Poland is the leader in the Central and Eastern Europe region, there is a gap in the use of financial instruments concerning the property market. Given the lack of a property derivatives market in Poland, conditions and opportunities for this market development are presented. The experience of the United Kingdom and the United States in this field shows that one of the most important aspects is stable and a well-functioning financial market. Therefore, the macroeconomic data and the data of the Polish financial market are examined.
The analysis carried out indicates sufficient conditions and opportunities for the development of real estate derivatives in Poland. The macroeconomic data and data from the capital market have shown the economic environment’s stability and balance. One of the limitations is the existence of a clear and respectable index used as an underlying asset in derivatives on the Polish market. Only WIG real estate index is listed on the Polish Exchange. Although there are sufficient conditions for introducing the real estate derivatives in Poland, the success of all financial innovations depends on the willingness of potential users to use them.

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    • Figure 1. Instruments traded on WSE in 1991–2018
    • Figure 2. Stocks traded value and number of listed companies on WSE in 1992–2018
    • Figure 3. Market capitalization of listed domestic companies (% of GDP)
    • Figure 4. Turnover ratio of domestic shares (%) in 1995–2018
    • Figure 5. Liquidity ratio for derivatives (%) in 1998–2018
    • Figure 6. Index for quarterly residential property prices selected in Q1-2010–Q1-2019
    • Figure 7. The office and retail price index (2004 = 100) in 2000–2018
    • Table 1. The overview of the introduction of real estate derivatives
    • Table 2. Selected macroeconomic indicators of the Polish economy
    • Table 3. Estimated value of property in Poland in 2014–2018
    • Table 4. Prime yields in selected European cities in 2017–2018
    • Conceptualization
      Agnieszka Majewska
    • Data curation
      Agnieszka Majewska
    • Formal Analysis
      Agnieszka Majewska
    • Funding acquisition
      Agnieszka Majewska
    • Investigation
      Agnieszka Majewska
    • Methodology
      Agnieszka Majewska
    • Project administration
      Agnieszka Majewska
    • Resources
      Agnieszka Majewska
    • Supervision
      Agnieszka Majewska
    • Validation
      Agnieszka Majewska
    • Visualization
      Agnieszka Majewska
    • Writing – original draft
      Agnieszka Majewska
    • Writing – review & editing
      Agnieszka Majewska