Crisis and policy interventions in Western European housing markets

Abstract

The central question in our paper is how the crisis impacts on national housing markets: how vulnerable are specific housing systems to the crisis? We searched for the consequences of the current crisis on housing markets in five countries: Ireland, Belgium, the Netherlands, Germany and England. The results show that we must first of all make a distinction between markets with a high turnover on the owner occupied market versus housing markets with a low turnover. High turnover is found in the England, Ireland and the Netherlands, while low turnover exists in Belgium and Germany. The high turnover markets show a domination of new construction by commercial large scale (speculative) development and a relatively high level of housing transactions in the existing stock. Low turnover markets are characterized by a relatively low number of transactions in the existing stock while in the house building market, the private ‘self’ build model prevails. The high turnover housing markets seem more vulnerable to a crisis, especially when combined with loose planning controls like in Ireland. With these insights we have tried to make a relation with crisis stimulus packages for national housing markets. For instance, the UK has implemented a wide range of housing market measures while the German government launched two massive packages to support the wider economy that did not include any specific housing market intervention.