The Market for Owner-Occupied Dwellings After the Crisis

Institutional Change and Shortages of Owner-Occupied Dwellings in the Netherlands

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Traditional neo-classical economic theories are failing to explain the current situation in the Dutch housing market. There is a high demand for newly built owner-occupied dwellings, but the production is not increasing as quickly as expected. New Institutional Economics is offering explanations for this situation. The institutions in the development sector changed during the real estate crisis, which caused a disruption of the governance structures. There are still thresholds, even in this favourable time, to form new development alliances. Those thresholds are caused by serval reasons, like financing issues, capacity problems and an increased risk awareness of all the involved parties. Relations should be reinvented, and incentives for market parties should be created to invest early in the development process.