Keywords
valuation approaches
non-performing loans
real estate market
How to Cite
Abstract
The study aims to analyse the relationship between macroeconomic indicators, real estate market dynamics, and the level of NPLs within the Ukrainian banking system in the period 2006–2023, while proposing a comprehensive methodological approach to determining the collateral value of real estate. The research methodology is based on regression and correlation analysis, the results of which indicate that 92.6% of the variance in real estate prices is explained by nominal GDP dynamics and the exchange rate, whereas the NPL ratio is 91.1% dependent on both its inherent persistence and the macroeconomic factors incorporated into the model. The primary methods of expert monetary valuation of real estate—income capitalisation, sales comparison, and the cost approach—are considered. The findings suggest that the integrated application of these three primary valuation methods enhances the accuracy of property appraisals. The originality of the research lies in its holistic analysis of the interplay between macroeconomic factors, real estate pricing, and NPL levels within the Ukrainian banking system. The developed models, characterised by high explanatory power, can serve as tools for forecasting real estate price trends and shifts in credit risk within the banking sector.
References
Abidoye, R. B., & Chan, A. P. C. (2018). Improving property valuation accuracy: A comparison of hedonic pricing model and artificial neural network. Pacific Rim Property Research Journal, 24(1), 71–83. https://doi.org/10.1080/14445921.2018.1436306
Almeida, R. P. (2025). Cycles, trends, disruptions: Real estate centrality on the global financial crisis, COVID-19 pandemic, and new techno-economic paradigm. Real Estate, 2(1), 1. https://doi.org/10.3390/realestate2010001
Alnabulsi, K., Kozarević, E., & Hakimi, A. (2022). Assessing the determinants of non-performing loans under financial crisis and health crisis: Evidence from the MENA banks. Cogent Economics & Finance, 10(1), 2124665. https://doi.org/10.1080/23322039.2022.2124665
Angrick, S., Bals, B., Hastrich, N., Kleissl, M., Schmidt, J., Doskoč, V., Molitor, L., Friedrich, T., & Katzmann, M. (2022). Towards explainable real estate valuation via evolutionary algorithms. In Proceedings of the Genetic and Evolutionary Computation Conference (GECCO). https://doi.org/10.1145/3512290.3528801
Augustyniak, H., Łaszek, J., Olszewski, K., & Waszczuk, J. (2018). Property valuation for mortgage purposes in Poland. Property Management, 36(2), 234–247. https://doi.org/10.1108/PM-09-2016-0049
Bank for International Settlements. (2025). Banks’ regulatory risk tolerance. https://www.bis.org
Baum, A., Manville Baum, C., Nunnington, N., & Mackmin, D. (2005). The income approach to property valuation (5th ed.). Estates Gazette. https://doi.org/10.4324/9780080937236
Bayar, Y. (2019). Macroeconomic, institutional and bank-specific determinants of non-performing loans in emerging market economies: A dynamic panel regression analysis. Journal of Central Banking Theory and Practice, 8(3), 95–110. https://doi.org/10.2478/jcbtp-2019-0026
Benmelech, E., Kumar, N., & Rajan, R. (2024). The decline of secured debt. Journal of Finance, 79(1), 35–93. https://doi.org/10.1111/jofi.13308
Bondarenko, E., Zhuravka, O., Aiyedogbon, J. O., Sunday, O. E., & Andrieieva, V. (2020). Structural modeling of the impact of bank nonperforming loans on the banking sector: The Ukrainian experience. Banks and Bank Systems, 15(2), 67–78. https://doi.org/10.21511/bbs.15(2).2020.07
Braun, J., Burghof, H. P., Langer, J., & Theissen, E. (2024). The volatility of housing prices: Do different types of financial intermediaries affect housing market cycles differently? Journal of Real Estate Finance and Economics, 69, 377–408. https://doi.org/10.1007/s11146-022-09907-y
Campello, M., Connolly, R. A., Kankanhalli, G., & Steiner, E. (2022). Do real estate values boost corporate borrowing? Evidence from contract-level data. Journal of Financial Economics, 144(2), 611–644. https://doi.org/10.1016/j.jfineco.2021.06.021
Cheng, C. T., Ling, G. H. T., Chin, H.-C., & Leng, P. C. (2023). Effects of multifaceted street art on price premium of pre war commercial buildings: The case of Georgetown UNESCO World Heritage Site. Land, 12(3), 626. https://doi.org/10.3390/land12030626
Clerc, L. (2019). Towards a Global Real Estate Market? Trends and Evidence. In R. Nijskens, M. Lohuis, P. Hilbers, & W. Heeringa (Eds.), Hot Property. Springer, Cham. https://doi.org/10.1007/978-3-030-11674-3_6
D’Amato, M., & Coskun, Y. (Eds.). (2022). Property valuation and market cycle. Springer. https://doi.org/10.1007/978-3-031-09450-7
Danila, N. (2024). Financial interdependencies: Analyzing the volatility linkages between real estate investment trusts, sukuk, and oil in GCC countries. International Journal of Financial Studies, 12(3), 92. https://doi.org/10.3390/ijfs12030092
De Toro, P., Nocca, F., Renna, A., & Sepe, L. (2020). Real estate market dynamics in the city of Naples: An integration of a multi-criteria decision analysis and geographical information system. Sustainability, 12(3), 1211. https://doi.org/10.3390/su12031211
DeLisle, J., & Grissom, T. (2011). Valuation procedure and cycles: An emphasis on down markets. Journal of Property Investment & Finance, 29(4/5), 384–427. https://doi.org/10.1108/14635781111150312
El Bied, S., Ros Mcdonnell, L., de-la-Fuente-Aragón, M. V., & Ros Mcdonnell, D. (2024). A comprehensive bibliometric analysis of real estate research trends. International Journal of Financial Studies, 12(3), 95. https://doi.org/10.3390/ijfs12030095
European Central Bank. (2025). Gross non-performing loans, domestic and foreign entities - % of gross loans. https://www.ecb.europa.eu
Eurostat. (2025). House price index (2015 = 100). https://ec.europa.eu/eurostat/databrowser/view/PRC_HPI_A__custom_2494155/bookmark/table?lang=en&bookmarkId=3edd74db-2abe-431b-b1eb-80e1536614da&c=1649769468883
Gabrielli, L., & French, N. (2020). Pricing to market: Property valuation methods – A practical review. Journal of Property Investment & Finance, 38(6), 589–602. https://doi.org/10.1108/JPIF-09-2020-0101
Guarini, M. R., Morano, P., & Sica, F. (2020). Historical school buildings: A multi-criteria approach for urban sustainable projects. Sustainability, 12(3), 1076. https://doi.org/10.3390/su12031076
Hu, S., Cheng, Q., Wang, L., & Xie, S. (2012). Multifractal characterization of urban residential land price in space and time. Applied Geography, 34, 161–170. https://doi.org/10.1016/j.apgeog.2011.10.016
Jajuga, K., & Jajuga, T. (2006). Inwestycje: Instrumenty finansowe, ryzyko finansowe, inżynieria finansowa. Wydawnictwo Naukowe PWN. (in Polish).
Johnson, L., Muldoon-Smith, K., & Greenhalgh, P. (2023). Unlocking value: The impact of traditional valuation practices on the number of vacant retail units in the built environment. Environment and Planning F, 3(4), 268–285. https://doi.org/10.1177/26349825231193219
Jones, C., & Leishman, C. (2006). Spatial dynamics of the housing market: An interurban perspective. Urban Studies, 43(7), 1041–1059. https://doi.org/10.1080/00420980600711316
Karanikolas, N., Kyriakidou, E., & Athanasouli, E. (2025). Artificial intelligence and real estate valuation: The design and implementation of a multimodal model. Information, 16(12), 1049. https://doi.org/10.3390/info16121049
Kauskale, L., Zvirgzdins, J., & Geipele, I. (2022). The real estate market and its influencing factors for sustainable real estate development: A case of Latvia. Baltic Journal of Real Estate Economics and Construction Management, 10(1), 171–199. https://doi.org/10.2478/bjreecm-2022-0012
Khairi, A., Bahri, B., & Artha, B. (2021). A literature review of non-performing loans. Journal of Business and Management Review, 2(5), 366–373. https://doi.org/10.47153/jbmr25.1402021
Kim, J., Seo, D., & Chung, Y. S. (2020). An integrated methodological analysis for the highest best use of big data-based real estate development. Sustainability, 12(3), 1144. https://doi.org/10.3390/su12031144
Klividenko, L. M. (2016). Current problems of studying macroeconomic indicators in the context of economic development. Money, Finance and Credit, 10, 804–808.
Kruсhok, N. S. (2012). Development of mortgage in investment of agrarian enterprises [Doctoral dissertation abstract]. National University of Life and Environmental Sciences of Ukraine.
Kruchok, S. I. (2003). Mortgage lending: European practice and development prospects in Ukraine. Urozhay.
Kucharska-Stasiak, E. (2025). The model of real estate valuation as an investor-oriented model. Real Estate Management and Valuation, 33(1), 104–112. https://doi.org/10.2478/remav-2025-0009
Maier, G., & Herath, S. (2009). Real estate market efficiency: A survey of literature (SRE Discussion Paper No. 2009/07). WU Vienna University of Economics and Business. https://doi.org/10.57938/0eecb7ef-1f65-4157-9931-459491d482bb
Martin, I. W. R., & Nagel, S. (2022). Market efficiency in the age of big data. Journal of Financial Economics, 145(1), 154–177. https://doi.org/10.1016/j.jfineco.2021.10.006
Miller, N. G., Peng, L., & Sklarz, M. A. (2011). The economic impact of anticipated house price changes—Evidence from home sales. Real Estate Economics, 39(2), 345–378. https://doi.org/10.1111/j.1540-6229.2010.00292.x
Miljkovic, I., Shlyakhetko, O., & Fedushko, S. (2023). Real estate app development based on AI/VR technologies. Electronics, 12(3), 707. https://doi.org/10.3390/electronics12030707
Mohan, S., Hutson, A., MacDonald, I., & Lin, C. C. (2019). Impact of macroeconomic indicators on housing prices. International Journal of Housing Markets and Analysis, 12(6), 1055–1071. https://doi.org/10.1108/IJHMA-09-2018-0070
Ministry of Finance of Ukraine. (2025). Gross domestic product of Ukraine (2002-2025). https://index.minfin.com.ua/en/economy/gdp/
Nwafor, C. N., & Nwafor, O. Z. (2023). Determinants of non-performing loans: An explainable ensemble and deep neural network approach. Finance Research Letters, 56, 104084. https://doi.org/10.1016/j.frl.2023.104084
Orford, S. (2000). Modelling spatial structures in local housing market dynamics: A multilevel perspective. Urban Studies, 37(9), 1643–1671. https://doi.org/10.1080/00420980020080301
Perez, C. (2010). The financial crisis and the future of innovation: A view of technical change with the aid of history (Working Papers in Technology Governance and Economic Dynamics No. 20). The Other Canon Foundation & Tallinn University of Technology.
Renigier-Biłozor, M., Biłozor, A., & Wiśniewski, R. (2017). Rating engineering of real estate markets as the condition of urban areas assessment. Land Use Policy, 61, 511–525. https://doi.org/10.1016/j.landusepol.2016.11.040
Renigier-Biłozor, M., Janowski, A., Walacik, M., & Chmielewska, A. (2022). Modern challenges of property market analysis: Homogeneous areas determination. Land Use Policy, 119, 106209. https://doi.org/10.1016/j.landusepol.2022.106209
Ryan, E., Horan, A., & Jarmulska, B. (2022). Commercial real estate and financial stability – New insights from the euro area credit register. Macroprudential Bulletin. https://www.ecb.europa.eu/press/financial-stability-publications/macroprudential-bulletin/html/ecb.mpbu202210_4~0aa7d44e15.en.html
Salas, M. B., Lamothe Fernández, P., Delgado, E., et al. (2024). Determinants of non-performing loans: A global data analysis. Computational Economics, 64, 2695–2716. https://doi.org/10.1007/s10614-023-10543-8
Shevchuk, O. & Shevchuk, O. (2022). Theoretical and methodological fundamentals of integral assessment of financial sustainability of the enterprise. In Global trends and prospects of socio economic development of Ukraine (pp. 406–439). Riga. https://doi.org/10.30525/978-9934-26-193-0-15
Siemińska, E., & Krajewska, M. (2017). Conditions and directions of investing in the world real estate market. Real Estate Management & Valuation, 25(4), 99–112. https://doi.org/10.1515/remav-2017-0033
Simo-Kengne, B. D., Gupta, R., & Bittencourt, M. (2013). The impact of house prices on consumption in South Africa: Evidence from provincial-level panel VARs. Housing Studies, 28(8), 1133–1154. https://doi.org/10.1080/02673037.2013.804492
State Statistics Service of Ukraine. (2025). Prices | State Statistics Service of Ukraine. https://www.ukrstat.gov.ua
Tajani, F., Morano, P., Salvo, F., & De Ruggiero, M. (2019). Property valuation: The market approach optimised by a weighted appraisal model. Journal of Property Investment & Finance, 38(5), 399–418. https://doi.org/10.1108/JPIF-07-2019-0094
Topraklı, A. Y. (2024). AI-driven valuation: A new era for real estate appraisal. Journal of European Real Estate Research, 18(1), 105-120. https://doi.org/10.1108/JERER-04-2024-0031
Tu, Y., Sun, H., & Yu, S.-M. (2007). Spatial autocorrelation and urban housing market segmentation. Journal of Real Estate Finance and Economics, 34(4), 385–406. https://doi.org/10.1007/s11146-007-9015-0
Wang, R., Cai, W., Ren, H., & Ma, X. (2023). Heterogeneous effects of the talent competition on urban innovation in China: Evidence from prefecture-level cities. Land, 12(3), 719. https://doi.org/10.3390/land12030719
Wang, T. (2022). Literature review of real estate bubble measurement methods. Learning & Education, 10(5), 251–252. https://doi.org/10.18282/l-e.v10i5.2762
Watkins, C. (2008). Microeconomic perspectives on the structure and operation of local housing markets. Housing Studies, 23(2), 163–177. https://doi.org/10.1080/02673030801893131
Wofford, L. E., Troilo, M. L., & Dorchester, A. D. (2010). Managing cognitive risk in real estate. Journal of Property Research, 27(3), 269–287. https://doi.org/10.1080/09599916.2010.518482
Wu, L., Cai, X., Zhang, W., & Liang, W. (2022). Research on cost approach for real estate appraisal of apartments based on GIS. In Proceedings of the 2022 International Conference on Mathematical Statistics and Economic Analysis (MSEA 2022) (pp. 1406–1411). Atlantis Press. https://doi.org/10.2991/978-94-6463-042-8_204
Wyman, D., Seldin, M., & Worzala, E. (2011). A new paradigm for real estate valuation? Journal of Property Investment & Finance, 29(4), 341–358. https://doi.org/10.1108/14635781111150286
Yiu, C. Y., & Murray, T. (2024). Housing price-vacancy dynamics—An empirical study of the Hong Kong housing market. International Journal of Financial Studies, 12(3), 74. https://doi.org/10.3390/ijfs12030074
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Copyright (c) 2026 Economics and Environment