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Why delay? Understanding the construction lag, aka the build out rate

Author

Listed:
  • Michael Ball
  • Paul Cheshire
  • Christian Hilber
  • Xiaolun Yu

Abstract

We explore the determinants of the speed with which residential development sites are built-out after construction starts. Based on a new model of developer behaviour in local markets, we use an instrumental variable and fixed effects empirical strategy to analyse a unique dataset of the near universe of the 1996-2015 residential developments in England. We find that positive local demand shocks accelerate building; less so in areas (i) with more restrictive local planning, (ii) that are more built-up, and (iii) where competition is lower. This suggests the slow site build-out rate in England results from both market and policy failures.

Suggested Citation

  • Michael Ball & Paul Cheshire & Christian Hilber & Xiaolun Yu, 2025. "Why delay? Understanding the construction lag, aka the build out rate," ERES eres2025_100, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2025_100
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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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