Print Email Facebook Twitter House Price, House Quality and Economic Growth Title House Price, House Quality and Economic Growth Author De Vries, P. Boelhouwer, P.J. Faculty OTB Research Institute Department OTB onderzoek Date 2010-06-01 Abstract The literature on housing markets suggest that periods of economic growth are characterised by a demand for better housing quality and increasing prices. The basic principles of the theory are that the short-run price fluctuations occur due to market imperfection, while over the long term, causality with such fundamentals as income will recover. Affordability of the higher quality then becomes a problem in the subsequent period of economic stagnation. This article seeks to identify the mechanism in which quality and affordability are weighed against each other, showing that the price-quality relationship changes with the economic growth. We do this against the background of the Dutch housing market. Our analysis shows that in a high-growth economy households search for better quality of property and are prepared to pay for it. In a stagnant economy the demand for quality takes second place to the demand for affordable homes. It also appears that appreciation of quality varies in particular between the low-growth phase and the medium-growth phase. The price-quality relationship barely varies between the medium-growth and high-growth phases. Subject house priceshouse qualityhousing marketeconomic growthThe Netherlands To reference this document use: http://resolver.tudelft.nl/uuid:b0f7839b-5e55-444b-b758-826f609f05b2 Publisher Università Bocconi Source European Real Estate Society Conference Conference - ERES 2010, 23-26 June 2010, Milan, Italy Part of collection Institutional Repository Document type conference paper Rights (c) 2010 Delft University of Technology Files PDF 257261.pdf 524.83 KB Close viewer /islandora/object/uuid:b0f7839b-5e55-444b-b758-826f609f05b2/datastream/OBJ/view