SPATIAL ANALYSIS OF THE RELATIONSHIP BETWEEN SALE PRICES AND RENTAL RATES AS INDICATORS OF THE RESIDENTIAL REAL ESTATE MARKET

Abstract

This article investigates spatial patterns in the relationship between residential sale prices and rental rates across the vernacular neighborhoods of Kharkiv. The study establishes the nature and strength of the correlation between secondary market housing prices per square meter and rental rates. The empirical basis comprises a geodatabase covering 146 vernacular neighborhoods in Kharkiv, containing verified and harmonized data on average housing prices and rental rates for one-, two-, and three-bedroom apartments as of the first half of 2026. Unlike traditional studies constrained by administrative divisions, this research employs a vernacular approach that provides higher spatial resolution for real estate market analysis. Pearson and Spearman correlation coefficients, along with a linear regression model, were applied to evaluate interdependencies between indicators, complemented by calculations of gross annual rental yield and investment payback periods. Regression residual analysis was utilized to identify areas overvalued or undervalued relative to their rental potential. The results confirm a statistically significant positive relationship between housing sale prices and rental rates. Taking the Saltivka residential area as a case study, vernacular detailing reveals significant internal heterogeneity within architecturally uniform districts – nuances typically obscured by administrative boundaries. Neighborhoods with the highest investment attractiveness for buy-to-let acquisitions were identified (notably the city center, which exhibited the shortest payback period), alongside localized market imbalances. The findings provide actionable insights for investors, analysts, and municipal authorities to assess territorial investment potential and support managerial decision-making.