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Demography and housing demand—what can we learn from residential construction data?

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  • Thomas Lindh
  • Bo Malmberg

Abstract

There are obvious reasons why residential construction should depend on the population’s age structure. We estimate this relation on Swedish time series data and OECD panel data. Large groups of young adults are associated with higher rates of residential construction. But there is also a significant negative effect from those above 75. Age effects on residential investment are robust and forecast well out-of-sample in contrast to the corresponding house price results. This may explain why the debate around house prices and demography has been rather inconclusive. Rapidly aging populations in the industrialized world makes the future look bleak for the construction industry of these countries.
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  • Thomas Lindh & Bo Malmberg, 2008. "Demography and housing demand—what can we learn from residential construction data?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(3), pages 521-539, July.
    • Handle: RePEc:spr:jopoec:v:21:y:2008:i:3:p:521-539
    DOI: 10.1007/s00148-006-0064-0
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    Cited by:

    1. Kuo‐Shing Chen & J. Jimmy Yang, 2020. "Housing Price Dynamics, Mortgage Credit and Reverse Mortgage Demand: Theory and Empirical Evidence," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(2), pages 599-632, June.
    2. Andrew Coleman & Özer Karagedikli, 2018. "Residential construction and population growth in New Zealand: 1996-2016," Reserve Bank of New Zealand Discussion Paper Series DP2018/02, Reserve Bank of New Zealand.
    3. Bruér, Mattias, 2002. "Can Demography Improve Inflation Forecasts? The Case of Sweden," Working Paper Series 2002:4, Uppsala University, Department of Economics.
    4. Monnet, Eric & Wolf , Clara, 2017. "Demographic cycles, migration and housing investment," Journal of Housing Economics, Elsevier, vol. 38(C), pages 38-49.
    5. Rong Fu & Dong Deng & Tao Liu, 2023. "The Impact of Aging on Housing Market: Evidence from China," Sustainability, MDPI, vol. 15(5), pages 1-13, February.
    6. Andreas Kyriacou & Leonel Muinelo-Gallo & Oriol Roca-Sagalés, 2015. "Construction corrupts: empirical evidence from a panel of 42 countries," Public Choice, Springer, vol. 165(1), pages 123-145, October.
    7. Thomas Lindh, 2004. "Medium-term forecasts of potential GDP and inflation using age structure information," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 23(1), pages 19-49.
    8. Lindh, Thomas & Malmberg, Bo, 2002. "Swedish post-war economic development. The role of age structure in a welfare state," Arbetsrapport 2003:4, Institute for Futures Studies.
    9. Pei-Syuan Lin & Chin-Oh Chang & Tien Foo Sing, 2016. "Do housing options affect child birth decisions? Evidence from Taiwan," Urban Studies, Urban Studies Journal Limited, vol. 53(16), pages 3527-3546, December.
    10. Éric Monnet & Clara Wolf, 2017. "Is demographics the housing cycle?," Rue de la Banque, Banque de France, issue 41, april..
    11. E. Monnet & C. Wolf, 2016. "Demographic Cycle, Migration and Housing Investment: a Causal Examination," Working papers 591, Banque de France.
    12. Bo Malmberg, 2010. "Low Fertility and the Housing Market: Evidence from Swedish Regional Data [Basse Fécondité et Marché du Logement: Une Analyse de Données Régionales Suédoises]," European Journal of Population, Springer;European Association for Population Studies, vol. 26(2), pages 229-244, May.
    13. Eichholtz, Piet & Lindenthal, Thies, 2014. "Demographics, human capital, and the demand for housing," Journal of Housing Economics, Elsevier, vol. 26(C), pages 19-32.
    14. Hurmekoski, Elias & Hetemäki, Lauri & Linden, Mika, 2015. "Factors affecting sawnwood consumption in Europe," Forest Policy and Economics, Elsevier, vol. 50(C), pages 236-248.
    15. Panagiotis Barkas & Mauro Pisu, 2018. "Boosting investment in Greece," OECD Economics Department Working Papers 1506, OECD Publishing.
    16. Miguel Saraiva & Peter Roebeling & Silvia Sousa & Carla Teotónio & Anna Palla & Ilaria Gnecco, 2017. "Dimensions of shrinkage: Evaluating the socio-economic consequences of population decline in two medium-sized cities in Europe, using the SULD decision support tool," Environment and Planning B, , vol. 44(6), pages 1122-1144, November.
    17. Nachatter Singh Garha & Alda Botelho Azevedo, 2021. "Population and Housing (Mis)match in Lisbon, 1981–2018. A Challenge for an Aging Society," Social Sciences, MDPI, vol. 10(3), pages 1-18, March.
    18. Evren Ceritoglu, 2017. "Disentangling Age and Cohorts Effects on Home-Ownership and Housing Wealth in Turkey," Working Papers 1706, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    19. Bo Malmberg, 2012. "Fertility Cycles, Age Structure and Housing Demand," Scottish Journal of Political Economy, Scottish Economic Society, vol. 59(5), pages 467-482, November.

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    More about this item

    Keywords

    Residential construction; Age distribution; Housing demand; R21; R23; R31;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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