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Demographics, human capital, and the demand for housing

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  • Eichholtz, Piet
  • Lindenthal, Thies

Abstract

This paper investigates how the demand for residential real estate depends on age and other demographic characteristics at the household level. Based on a detailed cross-sectional survey of English households, it finds that housing demand is significantly determined by a household’s human capital, and that housing demand generally increases with age. After retirement it declines, but only to a small extent. High education levels, good health, and high income will increase a household’s demand for housing even when households age. These results are relevant for countries that experience population shrinkage, but where total housing demand could still grow in the future despite stagnating household numbers and aging populations. The paper further shows that changes in demographics lead to very heterogeneous demand responses for different housing attributes, providing information regarding the future qualitative demand for housing.

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  • Eichholtz, Piet & Lindenthal, Thies, 2014. "Demographics, human capital, and the demand for housing," Journal of Housing Economics, Elsevier, vol. 26(C), pages 19-32.
    • Handle: RePEc:eee:jhouse:v:26:y:2014:i:c:p:19-32
    DOI: 10.1016/j.jhe.2014.06.002
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    3. Xinrui Wang & Eddie Chi-Man Hui & Jiuxia Sun, 2018. "Population Aging, Mobility, and Real Estate Price: Evidence from Cities in China," Sustainability, MDPI, vol. 10(9), pages 1-13, September.
    4. Lerbs, Oliver & Hiller, Norbert, 2015. "Aging and Urban House Prices," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113136, Verein für Socialpolitik / German Economic Association.
    5. Haroon Mumtaz & Roman Sustek, 2023. "Global house prices since 1950," Discussion Papers 2307, Centre for Macroeconomics (CFM).
    6. Xiaohong Deng & Lei Gong & Yanfang Gao & Xiaoqing Cui & Ke Xu, 2018. "Internal Differentiation within the Rural Migrant Population from the Sustainable Urban Development Perspective: Evidence from China," Sustainability, MDPI, vol. 10(12), pages 1-15, December.
    7. Alex van de Minne, 2011. "The Effects of Demographic Changes and Supply Constraints on Dutch Housing Prices," ERES eres2011_85, European Real Estate Society (ERES).
    8. Grant Alexander Wilson & Anthony Giuffre, 2022. "Private Rental Target Markets: A Comprehensive Spectrum," International Real Estate Review, Global Social Science Institute, vol. 25(1), pages 137-159.
    9. David Gray, 2023. "What Can District Migration Rates Tell Us about London’s Functional Urban Area?," JRFM, MDPI, vol. 16(2), pages 1-18, February.
    10. Sun, Tianyu & Chand, Satish & Sharpe, Keiran, 2018. "Effect of aging on housing prices: evidence from a panel data," MPRA Paper 94418, University Library of Munich, Germany, revised 01 Mar 2019.
    11. Xiaoping Zhou & Tong Lei & Yuyao Wang & Tianzheng Zhang & Yingjie Zhang & Yan Song & Yingxiang Zeng, 2022. "The spillover effect of senior neighbors on housing prices: Evidence from Beijing, China," Growth and Change, Wiley Blackwell, vol. 53(4), pages 1783-1812, December.
    12. Heo, Ye Jin, 2022. "Population aging and house prices: Who are we calling old?," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    13. Zhou, Qian & Shao, Qinglong & Zhang, Xiaoling & Chen, Jie, 2020. "Do housing prices promote total factor productivity? Evidence from spatial panel data models in explaining the mediating role of population density," Land Use Policy, Elsevier, vol. 91(C).
    14. Muthoka, Sila, 2015. "Household Demand for Housing in Kenya," MPRA Paper 65469, University Library of Munich, Germany.
    15. Yang, Jian & Yu, Ziliang & Deng, Yongheng, 2018. "Housing price spillovers in China: A high-dimensional generalized VAR approach," Regional Science and Urban Economics, Elsevier, vol. 68(C), pages 98-114.
    16. Yang, Jian & Tong, Meng & Yu, Ziliang, 2021. "Housing market spillovers through the lens of transaction volume: A new spillover index approach," Journal of Empirical Finance, Elsevier, vol. 64(C), pages 351-378.
    17. Adam Alexander Tyrcha, 2020. "The Impact of Migration on a Regulated Rental Market," REGION, European Regional Science Association, vol. 7, pages 35-48.
    18. Changkyu Choi & Hojin Jung, 2017. "Does an economically active population matter in housing prices?," Applied Economics Letters, Taylor & Francis Journals, vol. 24(15), pages 1061-1064, September.
    19. Monnet, Eric & Wolf , Clara, 2017. "Demographic cycles, migration and housing investment," Journal of Housing Economics, Elsevier, vol. 38(C), pages 38-49.
    20. Galesi, Alessandro & Mata, Nuria & Rey, David & Schmitz, Sebastian & Schuffels, Johannes, 2020. "Regional Housing Market Conditions in Spain," Research Memorandum 029, Maastricht University, Graduate School of Business and Economics (GSBE).
    21. Honghao Ren & Henk Folmer & Arno J. Van der Vlist, 2018. "The Impact of Home Ownership on Life Satisfaction in Urban China: A Propensity Score Matching Analysis," Journal of Happiness Studies, Springer, vol. 19(2), pages 397-422, February.
    22. Sun, Tianyu & Chand, Satish & Sharpe, Keiran, 2018. "Effect of Aging on Housing Prices: A Perspective from an Overlapping Generation Model," MPRA Paper 89347, University Library of Munich, Germany.
    23. Hiller, Norbert & Lerbs, Oliver W., 2016. "Aging and urban house prices," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 276-291.

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    More about this item

    Keywords

    Housing demand; Demographics;

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • J19 - Labor and Demographic Economics - - Demographic Economics - - - Other

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