Time to develop. A quantitative analysis on the ef-fect of price uncertainty on development timing in the Netherlands
Keywords
Loading...
Authors
Issue Date
2021-03-05
Language
en
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
According to plan capacity inventories there should be enough development plans to provide an answer to the growing demand for housing in the Netherlands. However, many plans are systematically delayed, implying the presence of an implementation gap between planned capacity and real housing construction. There are numerous factors that are theoretically expected to influence development, including price uncertainty. Having the option to delay investment can be valuable for the developer and uncertainty over prices influences this value. This study investigates the effect of price uncertainty on development timing, approaching the following research question: How does price uncertainty influence the development timing of residential development plans in the Netherlands? Besides price uncertainty, other plan-specific factors are included in the analysis. A proportional hazard analysis is applied on a large inventory of development plans from 2008 to 2019 of the province of Noord-Holland. The results of the hazard models suggest that price uncertainty systematically delays development timing. A one standard deviation increase in price uncertainty decreases the rate of construction with 5,65 to 9,48%. The results further suggest that other variables systematically influence development timing, including changes in market-related factors such as house price changes and changes in construction costs.
Description
Citation
Supervisor
Faculty
Faculteit der Managementwetenschappen