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Demography and housing demand—what can we learn from residential construction data?


  • Thomas Lindh


  • Bo Malmberg



There are obvious reasons why residential construction should depend on the population’s age structure. We estimate this relation on Swedish time series data and OECD panel data. Large groups of young adults are associated with higher rates of residential construction. But there is also a significant negative effect from those above 75. Age effects on residential investment are robust and forecast well out-of-sample in contrast to the corresponding house price results. This may explain why the debate around house prices and demography has been rather inconclusive. Rapidly aging populations in the industrialized world makes the future look bleak for the construction industry of these countries.
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Suggested Citation

  • Thomas Lindh & Bo Malmberg, 2008. "Demography and housing demand—what can we learn from residential construction data?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(3), pages 521-539, July.
  • Handle: RePEc:spr:jopoec:v:21:y:2008:i:3:p:521-539
    DOI: 10.1007/s00148-006-0064-0

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    Cited by:

    1. Thomas Lindh, 2004. "Medium-term forecasts of potential GDP and inflation using age structure information," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 23(1), pages 19-49.
    2. Bruér, Mattias, 2002. "Can Demography Improve Inflation Forecasts? The Case of Sweden," Working Paper Series 2002:4, Uppsala University, Department of Economics.
    3. Lindh, Thomas & Malmberg, Bo, 2002. "Swedish post-war economic development. The role of age structure in a welfare state," Arbetsrapport 2003:4, Institute for Futures Studies.
    4. Andreas Kyriacou & Leonel Muinelo-Gallo & Oriol Roca-Sagalés, 2015. "Construction corrupts: empirical evidence from a panel of 42 countries," Public Choice, Springer, vol. 165(1), pages 123-145, October.
    5. Hurmekoski, Elias & Hetemäki, Lauri & Linden, Mika, 2015. "Factors affecting sawnwood consumption in Europe," Forest Policy and Economics, Elsevier, vol. 50(C), pages 236-248.
    6. repec:eee:jhouse:v:38:y:2017:i:c:p:38-49 is not listed on IDEAS
    7. E. Monnet & C. Wolf, 2016. "Demographic Cycle, Migration and Housing Investment: a Causal Examination," Working papers 591, Banque de France.
    8. Eichholtz, Piet & Lindenthal, Thies, 2014. "Demographics, human capital, and the demand for housing," Journal of Housing Economics, Elsevier, vol. 26(C), pages 19-32.
    9. Evren Ceritoglu, 2017. "Disentangling Age and Cohorts Effects on Home-Ownership and Housing Wealth in Turkey," Working Papers 1706, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    10. Éric Monnet & Clara Wolf, 2017. "Is demographics the housing cycle?," Rue de la Banque, Banque de France, issue 41, april..

    More about this item


    Residential construction; Age distribution; Housing demand; R21; R23; R31;

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts


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