housing developments in european countries - Department of ...

Section 4
Outcomes
Outcomes Section 4
Table 4.6.1
Disequilibrating Factors in Housing Markets in European Countries up to 2004
Country
Disequilibrating Factors
Ireland
Problems of high inflation and shortage of skills
Malta
Shortage of land for development and a limited use
Slovenia
Financing of construction and inadequate supply of
Austria
Reduced central government subsidies towards local
government supports for house building and
refurbishment may reduce supply and increase prices.
within the construction industry, although these
have abated somewhat in 2002 and 2003,
shortage of serviced building land in high demand
areas.
of high-rise construction. There are high levels of
vacant and dilapidated properties which are not
available for use by those in need of housing.
Although rent control legislation has been liberalised,
Spain
serviced building land, particularly in urban areas, are
main problems here.
Limited supply of building land in cities where
Bulgaria
Low household incomes mean that demand for
housing is not supported by purchasing power and
consequently supply is low.
Italy
Supply of rental accommodation is insufficient to
meet core demand. In addition, this core demand
is supplemented by atypical demand – from
Netherlands
the remaining provisions in this regard are still
distorting the market.
Economic stagnation has made consumers unwilling
Sweden
demand is highest.
Low rate of housing output in areas of high demand.
This is the result of: lack of appropriately located
Cyprus
Continually rising construction cost is due to the
general rising cost of land, materials, petrol, lack of
availability of labour.
immigrants, students, non-resident workers and
tourists – which gives rise to speculative behaviour
on the part of investors in this market and means
that dwellings are not available to meet core
to invest in housing. Therefore selling and buying
dwellings in the more expensive segment of the
market has become more difficult. This has led to a
lack of mobility in the housing market which has
land, high costs of production, impediments related
to the planning system including the level of appeals
and unwillingness among some local authorities to
increase the local population for fear of rising costs
Czech Republic
Denmark
Estonia
Finland
France
Lack of private sector involvement in the construction
of rental housing is due to the long period of return
on investment in this sector compared to owneroccupied
dwellings. This is compounded by the
impact of rent control measures which have affected
an unbalanced distribution of the rights between
landlords and tenants and also by shortcomings in
government measures intended to support housing
construction.
Rent control inhibits mobility in the housing market
and discourages the construction of private rented
dwellings.
Impact of the planning process, particularly in rural
areas, means that the building process is quite a
time-consuming activity.
A low interest rate environment drives demand for
owner-occupied housing. Although this decreases
pressure on the private rented market it also
increases land prices which can create difficulties for
the construction of social rented housing. There is
insufficient development in some growth areas.
Oversupply of social housing and of affordable
private housing in some areas, and an under-supply
in others. Also in some regions competition between
demand for principal and secondary residences, has
created affordability difficulties in the former sector.
Latvia
Lithuania
demand. There are housing access problems
among socially excluded sections of the
population including: immigrants, the ‘new poor’
including those in precarious employment, older
people and single people. Also, problems relating
to the management of the State-subsidised
housing stock. These include: insufficient supply,
particularly of accessible housing appropriate for
older people and disabled people; overcrowding,
low turnover of tenants, rent arrears, limited
resources for management and inadequate
maintenance of dwellings and estates.
Low household incomes mean that demand for
housing is not supported by purchasing power.
Also, construction of non-residential developments
rather than dwellings. Insufficiently
developed financial system and legislative
arrangements.
Sharp reduction in construction activity, due to a
fall in direct funding by the State for this sector
and the failure of the private sector to
compensate for withdrawal of funding. Low
average incomes mean demand is not supported
by purchasing power. The costs of new
infrastructure are high. There is a limited supply of
development land and unresolved issues in
relation to land restitution. Local authorities are
slow in preparing land use planning documents.
Poland
Portugal
Romania
impeded access by new households.
Problems in accessing mortgage finance.
A scarcity of building land and high land prices in
areas of high housing demand are problems here.
There is excessive bureaucracy associated with
construction.
Problems are: the high cost of building materials,
resulting from the monopolistic position of newly
privatised and consolidated domestic producers,
coupled with protection of the internal market by
high tariffs on imported materials; inadequate supply
of development land particularly in urban areas
where demand is highest. This is the result of:
unresolved restitution issues, indeterminate
ownership status of land; earlier high density
development policies in urban areas; planning
restrictions which impede the extension of existing
urban areas, austerity budgets in local government
which have created difficulties in servicing land, and
bureaucratic and lengthy procedures in the planning
and building process, some of which entail high
administrative fees. In addition, the high cost of
finance for developers or building companies is an
impediment to new developments as is the underdevelopment
of the market in land and property, which
is characterised by little competition, allegedly high
profit margins and a suggestion that speculators may
be hoarding land to keep prices high.
for municipal services. In addition, output of
apartment blocks both for rent and for owner
occupation is a particular problem because it is also
impeded by lack of incentives for the housing
companies to invest in new production and
inadequate planning by local authorities.
Turkey
Many difficulties arising from recently adopted
procurement legislation such as the need for a very
lengthy bidding process. In addition, lack of finance
has impeded both public and private sector
construction as has the shortage of land for
construction. There is a lack of availability of
mortgage loans and finance for housing developers.
United Kingdom Shortage of skilled workers in the construction
industry, particularly in the home building sector.
Note: information is not available for Belgium and Greece.
Germany
Hungary
Increases in the price of building land, particularly in
the west of the country.
Limited mobility among existing home owners. Low
average incomes mean that demand is not supported
by purchasing power.
Luxembourg
Demand is being driven up by population growth
and rising number of households. Supply has been
stymied by the high price of building land and
high construction costs. In addition, more and
more households are encountering difficulties in
securing the finance for new buildings.
Slovakia
Low household incomes mean that demand is not
supported by purchasing power. There is limited
availability of serviced building land in high demand
areas, indeterminate ownership status of land;
insufficient supply of less expensive dwellings
suitable for first-time buyers and older people.
148 European Union Report
Regular National Report on Housing Developments in European Countries
149