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Residential Mobility in the Dutch Housing Market

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  • Frans Schilder

Abstract

This paper is the first part of a dissertation with various topics on the Dutch housing market. Future research is likely to include studies into price formation and development, and consumer behavior in the housing market. Conijn (2006) claims that the Dutch housing market is strongly dysfunctional. There are little people that will disagree. Too little new construction, problems for new entrants on the housing market, hardly any connection between the rental and the owner-occupied sector: these are just a few topics exemplifying the problematic state of the Dutch housing market mentioned by Conijn (2006). One of the most commonly mentioned solutions in the Dutch housing debate is the stimulation of moving behavior. This paper addresses some of the key issues of (the stimulation of) moving behavior in the residential housing market. The focus of this study, however, is mostly on the interplay between the owner-occupied sector and the rental sector in the Dutch residential housing market and its effects on residential mobility as it is especially there that there seems to be a lack of mobility. In this study residential mobility is modeled using interview data from the Dutch Ministry of Housing, Spatial Planning and the Environment: WoON 2006. A vacancy chain analysis is performed to model residential mobility and study the similarities and differences between the owner-occupied and the rental sector. Furthermore, the vacancy chain analysis is used to simulate some policy implications. A loglinear model is used to model the interplay between the owner-occupied and rental sector as well as the interplay between sub-segments within those sectors. Finally, this study seeks explanations for the presented mobility patterns based on the before mentioned housing questionnaire. This paper adds to existing literature by stratifying the origin/destination tables that serve as the basis of this study in a different way: not by tenure classes and than by price as is common in this line of research, but according to the user-cost principle (Conijn and Elsinga, 1998). After all, housing in the owner-occupied sector serves both as a consumption good as well as an investment. Interpreting mobility of households is therefore confounded when looking across housing sectors. The user-cost principle is introduced in this study to deal with this issue; the user-cost principle subtracts all subsidies and fiscal effects and adds all expenditures to come to a figure that solely represents the cost of the housing services consumed. This allows for a more tenure neutral comparison of residential mobility. Preliminary results suggest that indeed the owner-occupied sector and the rental sector in the Netherlands are two very detached sectors. Moreover, evidence suggests that the lack of mobility between both sectors can be ascribed to the Dutch (implicit) subsidization schemes and financial constraints.

Suggested Citation

  • Frans Schilder, 2008. "Residential Mobility in the Dutch Housing Market," ERES eres2008_308, European Real Estate Society (ERES).
  • Handle: RePEc:arz:wpaper:eres2008_308
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    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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