International variations in new housing supply

• Published in: International journal of housing markets and analysis Vol. 1; no. 4; pp. 379 - 392
• Main Authors: Catherine Fortune, Charlotte, Moohan, James Anthony John
• Format: Journal Article
• Language: English
• Published: Bingley Emerald Group Publishing Limited 21.11.2008
• Subjects: Capital costs; Case studies; Construction costs; Economics; Elasticity of demand; Estimates; Housing; Housing needs; Housing prices; Housing starts; International; Price elasticity; Pricing policies; Qualitative research; Quantitative research; Studies; Supply & demand; War; Supply and demand; Housing; Europe; United States of America; Pricing
• ISSN: 1753-8270; 1753-8289
• DOI: 10.1108/17538270810908669

Purpose - The purpose of this paper is to investigate the factors that affect the responsiveness of new housing supply to price changes in Denmark, France, Germany, The Netherlands, Spain, the UK and the USA. The practical purpose is to identify and consider the similarities and differences in the factors that affect new housing supply amongst the selected countries.Design methodology approach - Quantitative estimates of the price elasticity of new housing supply were reviewed and evaluated. Generally they were found to describe and measure but not explain variations in housing supply responses to house price changes. Qualitative research was undertaken based on case study interviews with experienced senior managers of house-building firms with the objective of obtaining insights into the variables affecting housing supply in each country.Findings - First, quantitative studies provide necessary but insufficient explanation of the factors determining new housing supply. Second, there are a large number of macro-economic, micro-economic and institutional factors that explain new housing supply which appear to vary in absolute and relative importance between countries.Research limitations implications - The primary research findings are based on a small number of case study interviews. Further work is required to confirm the insights using more interviews and or large-scale surveys. The work could also be undertaken at other times in different market conditions.Practical implications - Factors explaining variations in new housing supply in each country have been shown to vary amongst countries. Policy makers can address these factors in achieving balance between supply and demand, and in understanding what needs to be done to increase new housing supply.Originality value - The research demonstrates the value of adopting a pluralist methodology in measuring and explaining the causes of variations in new housing supply.