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The Price Responsiveness of Housing Supply in OECD Countries

  • Aida Caldera Sánchez
  • Åsa Johansson

The responsiveness of housing supply to changes in prices bears important implications for the evolution of housing prices and the speed of adjustment of housing markets. This paper estimates the long-run price elasticity of new housing supply in 21 OECD countries based on a stock-flow model of the housing market estimated within an error correction framework. Estimates suggest that housing supply responsiveness to price changes varies substantially across countries. New housing supply is relatively more flexible in North America and some Nordic countries, while it is more rigid in continental European countries and in the United Kingdom. The responsiveness of housing supply depends not only on national geographical and urban characteristics but also on policies, such as land use and planning regulations. The estimates are broadly in line with the limited available evidence on the responsiveness of housing supply in OECD countries. La Réactivité de l'Offre de Logements dans les Pays de l'OCDE La réactivité de l'offre de logements à l'évolution des prix a des implications importantes pour l'évolution des prix du logement et la vitesse d'ajustement des marchés du logement. Ce document estime l'élasticité-prix à long terme de l'offre de nouveaux logements dans 21 pays de l'OCDE basée sur une approche stock-flux du marché du logement et un modèle à correction d’erreurs. Selon les estimations, la réactivité de l'offre de logements aux changements de prix varie considérablement selon les pays. L’offre de logements nouveaux est relativement plus souple en Amérique du Nord et certains pays nordiques, tandis qu'elle est plus rigide dans les pays du continent européen et au Royaume-Uni. La réactivité de l'offre ne dépend pas seulement des caractéristiques géographiques et urbaines, mais aussi des politiques publiques, telles que les règles d'urbanisme et d'utilisation du sol. Les estimations sont globalement en ligne avec les rares estimations disponibles sur la réactivité de l'offre de logements dans les pays de l'OCDE.

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Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 837.

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Date of creation: 26 May 2011
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Handle: RePEc:oec:ecoaaa:837-en
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  1. Christopher J. Mayer & C. Tsuriel Somerville, . "Land Use Regulation and New Construction," Zell/Lurie Center Working Papers 331, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
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