Transcript PowerPoint-presentatie

Crisis measures for Western
European housing markets
Urban Institute
Peter Boelhouwer
OTB Research Institute for the Built
Environment
Crisis measures for Western European housing markets
1 6-4-2010
Content
• Introduction
• Crisis on the general market and the impact on housing
markets
• How big is the housing crisis?
• Measures taken
• Evaluation
• Influence of the structure of the housing market
Crisis measures for Western European housing markets
2 6-4-2010
Introduction
• Economic crisis started on the American Housing Market
• Overview of housing market related crisis measures in nine
Western European countries
• General loss of confidence amongst prospective home
buyers
• Generous welfare states can avoid repossessions
• The rate of speculative building
• Support to the house building industry or housing market
in general
• Support to households
• Relation with other policy fields
Crisis measures for Western European housing markets
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Economic and housing market
indicators by country
Bel Ger
General economic indicators
Growth GDP 2009
-2.9 -5.0
Growth GDP 2010
0.6
1.2
Unemployment
average 2007 – 2009
Unemployment latest
(jan 2010)
IRL
ES
F
NL
AT
SW
UK
-7.5
-1.4
-3.6
-0.8
-2.2
1.2
-4.5
0.3
-3.7
1.1
-4.9
1.4
-5.0
0.9
7.5
7.7
7.5
12.5
8.5
3.2
4.4
6.9
5.5
8.0
7.5
13.8
18.8
10.1
4.2
5.3
9.1
7.8
-7%
-6%
-7%
1%
6%
-18%
Down
up
up
-33%
nav
-10%
Housing market indicators
House price change
0% -12% -23%
Mid 2007 – mid 2009*
Latest house price
up stable Down
(rapidly)
trend
Transactions 20072008
-
Building permits 20072008
-
4
%
-2%
-36%
(rapidly)
stable stable
nav
-11%
up
-46%
-6%
-20%
-60% -17% -1%
nav -16% Construc3
ting new
%
series
*Mid 2007 the house prices in most countries
reached their highest levels; mid 2009 is the year where most nations have data
available.
Note: Germany and Belgium = single family dwellings
Source: GDP and Unemployment = Eurostat; House price change = national statistical
bureaus and Hypostat 2008; Transactions 2007-2008 = Hypostat 2008; Transactions
latest is national sources.
Crisis measures for Western European housing markets
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House price indices annually and
recent quarters (1)
250.0
200.0
150.0
100.0
50.0
0.0
2000
2001
2002
Netherlands
2003
Germany
2004
2005
England and Wales
2006
Belgium
2007
2008
Ireland
Crisis measures for Western European housing markets
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House price indices annually and
recent quarters (2)
300
250
200
150
100
50
0
2000
2001
2002
2003
France
Spain
2004
2005
Austria
2006
2007
2008
Sw eden
Crisis measures for Western European housing markets
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House price indices annually and
recent quarters (3)
120.0
100.0
80.0
60.0
40.0
20.0
0.0
2007 I
2007 II
2007 III 2007 IV
Netherlands
2008 I
Germany
2008 II
2008 III 2008 IV
England and Wales
2009 I
2009 II
Belgium
2009 III 2009 IV
Ireland
Crisis measures for Western European housing markets
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House price indices annually and
recent quarters (4)
115
110
105
100
95
90
85
80
2007 I 2007 II 2007 III 2007
IV
2008 I 2008 II 2008 III 2008
IV
France
Spain
Austria
2009 I 2009 II 2009 III 2009
IV
Sw eden
Crisis measures for Western European housing markets
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Measures taken
• Protection of home owners: avoiding payment problems
and eviction
• Stimulating demand for a new existing owner occupied
homes by households
• Stimulating social/public housing associations to take on
unsold completed new dwellings initially targeted for
owner occupation
• Stimulating production of social/public rental dwellings as
an anti-cyclical measure for the construction sector
Crisis measures for Western European housing markets
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Type of measures taken by country
Bel Ger IRL
ES
F
NL
AT
SW
UK
No
Yes
Protection of home owners
Yes No
Yes, but Yes
limited
Not yet? Yes No
Stimulating demand new
owner occupied homes
Yes No
Yes
Yes
Yes
Yes Yes, but Yes, but Yes
limited limited
Stimulating demand existing
owner occupied homes
No
No
Yes
Yes
No
Yes No
No
Yes
Converting unsold new owner
occupied dwellings into rental
by public institutions
No
No
Yes
No
Yes
Yes No
No
Yes
Stimulating construction of
public rental dwellings with
additional public grants
Yes No
No
Yes, but Yes
limited*
No
No
No
No
Reanimating high potential
housing projects with public
grants
No
No
No
No
No
Yes No
No
Yes
Number of yes
3
0
3 1/2
4
5
5
1/2
5
1/2
*Shift of subsidies to rental but no extra budget
Crisis measures for Western European housing markets
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Crisis measures what to do and what
not to do?
•
•
•
•
•
•
•
Number of countries have taken only limited action
Extra protection for home owners to avoid repossessions
Attempts to get rid of the overhang/unsold dwellings
Stimulating demand for newly constructed dwellings
Building of new social housing
Buying unsold new dwellings by social landlords
Unlimited speculative building and a laissez faire attitude
on planning
• Differences in the structure of the housing market are
quite important to explain the crisis and measures
Crisis measures for Western European housing markets
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Structure of the (owner occupied)
housing market: Dynamic markets
• Unified markets
• New and existing dwellings compete for purchasers
• Existing tenures influence activities in new building
construction
• Market sub-sectors are linked together trough transactions
by existing home owners
• All parts of the national owner-occupied markets are linked
by common market forces
• Speculative promotion
• Speculative house building
• Investment good
• Price of existing homes determines the price of new
properties
Crisis measures for Western European housing markets
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Structure of the (owner occupied)
housing market: Static markets
• Fragmented markets
• Domination by first time buyers
• Variety of sub-markets differentiated by region or housing
sector
• Low rate of mobility of existing home-owners
• Self building or self commissioned house building
• Consumer good
• Costs of construction and land have a significant relation
with house prices
Crisis measures for Western European housing markets
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Sensitivity of housing markets to the
economic climate
• Dynamic markets or more sensitive than static markets
• Effects of crisis are strongest in England and Ireland:
limited stabilizing factors through government policy or via
financial industry, buildings are built speculatively and in
Ireland few planning restrictions
• Dutch market for new houses has been hit hard
• Germany prices of existing dwellings show a strong decline
• Belgium least trouble form the economic crisis
Crisis measures for Western European housing markets
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Conclusions
• Countries that are severely affected by the crisis are also
confronted with the largest problems on the housing
market
• Difficult to establish the effects of the economic crisis and
the effect of the structure of the housing market and
stabilizing factors
• Possible relation to the general economic structure and the
housing market structure: a nation that is highly sensitive
to the general economic climate also has a housing market
structure that is sensitive to the economic climate
Crisis measures for Western European housing markets
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End
Crisis measures for Western European housing markets
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