|HOUSE PRICE, HOUSE QUALITY AND ECONOMIC GROWTH
|De Vries, Paul
|Periods of economic growth are characterised by a demand for better housing quality and increasing prices. Affordability of the demand for higher quality then becomes a problem in the subsequent period of economic stagnation. This article seeks to identify the mechanism in which quality and affordability are weighed against each other, showing that the price-quality relationship changes with the economic growth. We do this against the background of the Dutch housing market. Our analysis shows that in a high-growth economy households search for better quality of property and are prepared to pay for it. In a stagnant economy the demand for quality takes second place to the demand for affordable homes. It also appears that appreciation of quality varies in particular between the low-growth phase and the medium-growth phase. The price-quality relationship barely varies between the medium-growth and high-growth phases.
|Year of publication:
|House Prices, House Quality, Housing Market, Economic growth, the Netherlands
De Vries, Paul (2010).
HOUSE PRICE, HOUSE QUALITY AND ECONOMIC GROWTH. 17th Annual European Real Estate Society Conference in Milan, Italy,