Vacancy chains and the degree of mobility in the housing market

Mobility among different states of the housing market (e.g., among tenure modes and price classes) not only generates liquidity but also carries a crucial effect on the price pattern in the market. Studying housing mobility may thus provide insights to the current developments in worldwide housing markets. We theoretically explore vacancy chains and mobility in the market where, among the various results, we show that, in comparing markets with different degrees of mobility, when the probability to transit from any given state to lower states is zero, the expected number of intra-state transitions (as opposed to inter-state transitions) is always smaller in the market that allows for the greater mobility. Also, we derive upper and lower bounds for the expected number of intra-state transitions in the market and specifically show that the “multiplier effect” of the vacancy chain represents a lower bound for this measure. Among the other results, we show that, for every given housing state i, the expected number of intra-state vacancy transitions is greater than the expected number of inter-state transitions for all states j ≠ i. Moreover, we find a condition under which we characterize a subgroup of markets whose expected number of intra-state transitions is greater than the expected number of inter-state transitions for each vacancy chain. Our analysis of mobility and vacancy chains, while specifically focusing on housing markets, may be generalized to other markets as well.     

Advancing understandings of housing supply constraints: housing market recovery and institutional transitions in British speculative housebuilding

Abstract

The vicissitudes and volatilities of recent housing market cyclicality have restructured, reconfigured and reorganized housing systems and their supply demand characteristics. Surprisingly, little attention has been paid to (re)examining supply side outcomes, much less the influencing effect of supply behaviour in response to demand-side change and their interactions. Indeed, one of the biggest unanswered questions in housing studies today is how supply side characteristics, specifically those of speculative housebuilders, have been affected by the turbulent, transitionary context presented by the global financial crisis. Addressing the gap, this paper presents a novel analysis of how Britain’s biggest housebuilders respond to significant institutional shock in their operating environment and considers how this enables and constrains housing supply outcomes in the post-recession context.     

Matching housing supply and demand: an empirical study of Hong Kong's market

This paper has the objective of improving on the issue of forecasting new housing construction, and highlights differences between space demand and investment demand in housing markets. Further, it indicates how these differences will affect construction decisions. The first step is to identify the factors associated with estimating residential property prices in Hong Kong, based on a demand-supply adjustment process. Specifically, this study examines the role of population growth, transaction volume, inflation and interest rate in determining house prices. Second, based on these estimations, a methodology is developed to estimate the investment demand schedule and new construction of residential property.     

Meeting housing needs through the market: An assessment of housing policies and the supply/demand balance in France and Great Britain

In both Britain and France, for the last 15 years or so, housing policy has become more market‐orientated. This paper examines what this has meant for the balance between supply and demand and for progress in meeting housing needs. Current projections for how housing needs and the demand/supply balance will develop in the 1990s are also analysed. For each country, the determinants of housing demand, both demographic and economic, and the supply position in both the private and public sectors, are examined. Several common issues are identified: the existence of unmet housing needs, problems of indebtedness, the limits to the expansion of owner occupation, problems of social housing finance, and concerns about the decline of the private rented sector. There are also important differences between the two countries: housing output remains at a higher level in France than in Britain; deregulation of housing finance has gone further in Britain than in France; and in France there remains a greater recognition by government that housing is a national responsibility. But in both countries, the ‘marketisation’ of housing policy has meant that housing outcomes have become more dependent on factors external to the housing system.     

Tornado shelters and the housing market

Mitigation against natural hazards often involves long‐lived, immobile investments. Home owners must be able to capture the present value of future benefits to equate the private and societal return on mitigation. The capitalization of mitigation into home prices thus is crucial for home owners to have a proper incentive for mitigation. We investigate the existence of a premium for tornado shelters using home sales in Oklahoma City, where the deadly tornado outbreak of 3 May 1999 and the Oklahoma Saferoom Initiative increased public awareness of tornado shelters. We find that a shelter increases the sale price of a home by 3.5% to 4% or approximately $4200 given the mean price of homes sold in 2005. The magnitude of the premium is plausible given that shelters retail for $2500–$3000 installed.     

Global exposure and Auckland's housing market

This is a story of how economic reforms in New Zealand since the mid-1980s changed conditions for investment in the property sector and have periodically distorted Auckland's housing market. The contribution of immigration and funds that migrants have brought with them, and their strong preference for Auckland as a destination, also help to account for the growth of Auckland and activity levels in the housing market. The opening up of the New Zealand economy in the last two decades has exposed Auckland to growth pressures that are now evident in the city's labour and housing markets.     

Stochastic market equilibria with rationing and limited price flexibility

In this paper we consider a market where a heterogeneous population of individual actors demands units of various types of a heterogeneous good (for example, housing). It is assumed that allocation of the market does not take place completely by means of the price mechanism, either because prices are fixed, or because they can only vary within some limited range. Rationing is assumed to take place by preventing some actors from realising the alternative they have chosen.We will prove three existence theorems. First of all, we demonstrate the existence of a rationed equilibrium when all prices are completely fixed. Second, we show the existence of a mixed equilibrium, that is, an equilibrium where demand and supply are matched partly by means of price adjustments and partly by means of quantity rationing. Third, we prove the existence of a mixed equilibrium in a situation where the rationing is allowed to vary over the different classes of consumers and over their present situation. This introduces the possibility of giving a preferential treatment to some groups of consumers. The second theorem is a generalisation of the first and the third a generalization of the second.     

Labour market change and housing market segmentation in south Australia's non-metropolitan private rental market

This paper reports on research into the relationship between labour market change and the private rental market in non-metropolitan South Australia for the period 1990 to 2000. It finds that there is considerable 'stickiness' within the market and that there has been a limited supply response to changing levels of demand. This has contributed to housing and labour shortages in some regions and over-supply in others. Each circumstance has generated considerable dilemmas for public policy.     

Information and competitive equilibria in the housing market

This paper derives necessary and sufficient conditions for the existence and occurrence likelihood of competitive equilibria in urban land and housing markets: (i) when there is imperfect information causing costly search trips and (ii) when land and housing are differentiated according to between‐zone and within‐zone heterogeneity. Such competitive equilibria are contingent on the possibility that consumers spill over into the markets of less preferred zones. The main conclusions are that markets tend to be partitioned into homogeneous sub‐groups and when they do not, heterogeneity may hamper the effectiveness of search and hence work against the existence of competitive equilibria.     

Global exposure and Auckland's housing market1

This is a story of how economic reforms in New Zealand since the mid‐1980s changed conditions for investment in the property sector and have periodically distorted Auckland's housing market. The contribution of immigration and funds that migrants have brought with them, and their strong preference for Auckland as a destination, also help to account for the growth of Auckland and activity levels in the housing market. The opening up of the New Zealand economy in the last two decades has exposed Auckland to growth pressures that are now evident in the city's labour and housing markets.     

Labour mobility and housing: the impact of housing tenure and housing affordability on labour migration in the Czech Republic

This article examines whether housing tenure and regional differences in housing affordability have an impact on labour mobility. This relationship is important for understanding the sources of structural unemployment and impediments to economic growth. Using two sample surveys from the Czech Republic, this research reveals that at the individual level housing tenure is the most powerful factor determining willingness to change residence for employment reasons. A time-series regression analysis reveals that the impact of housing affordability on observed interregional migration patterns is relatively weak and that this effect is concentrated among the highly educated seeking employment in the capital, Prague. These results demonstrate that housing tenure has a significant impact on labour migration plans in case of unemployment and that the dynamic impact of regional differences in housing affordability on labour mobility is concentrated within the most highly skilled segment of the labour force.