Unravelling the Dutch housing puzzle – Market dynamics and housing development delays: analysing the role of market concentration on the Dutch housing market
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2024-07-05
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en
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The Dutch housing market has been plagued by persistent shortages and delays in housing development, prompting increased governmental intervention. This study investigates the role of market concentration in these delays, exploring whether the dominance of a few large firms in the housing market contributes to inefficiencies and slower project completion. Using municipal-level data from 2015 to 2021, this research uses two datasets and combines them to measure market concentration and its effects on various stages of housing development, including the number of homes in the pipeline, permitted, under construction, and newly built.
The findings reveal that while market concentration alone does not significantly affect the number of homes in the pipeline, it interacts negatively with housing demand. In highly concentrated markets, the positive impact of rising housing prices on housing development is diminished, suggesting that dominant firms may delay development to maximize profits. This study contributes to the understanding of housing market dynamics in the Netherlands, providing valuable insights for policymakers aiming to reduce market inefficiencies and accelerate housing delivery.
By identifying the mechanisms through which market concentration affects housing development, this research underscores the need for regulatory measures to foster competition and enhance market responsiveness. The results highlight the importance of considering both market structure and demand factors in formulating effective housing policies, aiming to mitigate the current housing crisis and ensure timely project execution.
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Faculteit der Managementwetenschappen