THE UNREGULATED REAL ESTATE MARKET

Jo. P. Soeter and Peter de Jong

ERES from European Real Estate Society (ERES)

Abstract: Since the eighties the free market approach is crowding out the traditional regulation of building activity and real estate development. Gradually, developers and investors got a more dominant position in real estate development and accommodation. The advantages of a more market oriented development of real estate are evident. Nevertheless, the functional fragmentation in usage, property, asset, capital, development, land and construction market limits the co-operation of the market actors and their collective tuning. The lack of transparency, elasticity and competition leads in combination with the externalities of property to a market performance, which has to be assessed on market efficiency and social impact. In The Netherlands the post war system of production regulation by building permits is dismantled in the late sixties and seventies. What remained was the regulation of building production by a permissive land use planning of the local government. On the national scale, this regulation stimulates oversupply of land for building activities, since municipalities compete with each other for more people, jobs, housing and property. In this contribution the Dutch real estate system will be analysed and discussed in terms of past and future market and planning conditions, market efficiency and social impact. Market efficiency is investigated within the chain usage market, property market and development & construction market. Subsequently, market imperfections are identified and evaluated. In a prospective view the real estate market is projected in terms of public and private demand, supply and capacity of the real estate & construction sector and optimal governance.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2008-01-01
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