Abstract for: Construction Industry Forecasting System Dynamic Model

Construction branch forecasting model allows estimate the industry development problems. The main attention is turned to the living area construction. The model consists of several sub-models: amount of apartments, real estate prices, needs for apartments and living area forecasting models. The apartments amount forecasting model bases on principle if there is insufficient number of apartments in the economic system, then, first of all, apartments with small areas are financed and constructed, i.e., multistory buildings with one-room apartments. The increase of apartment’s amount depends on the financing that is intended for construction, as well as from the average apartment area and construction costs per square meter, in other words, from funding and construction costs. The real estate prices influential parameters are the increase or decrease of the housing fund, the total apartment market influence on separate segments in apartment market (and vice versa). The apartment’s needs influential factors there are an increase of apartments’ amount; depreciation of apartments (reduction of amount); improvement of living conditions. In paper shown, that in Latvia the balanced amount of apartment construction is approximately 1800 apartments per the year, but considering the fluctuations of surplus and needs, it can temporarily fluctuate from 1434 to 2019.