INEFFICIENCIES ON THE DANISH HOUSING MARKET

In the latest OECD (2006) survey of the Danish economy it is shown that direct and indirect subsidisation of the housing sector accounts for 2.7 per cent of GDP in Denmark. This can be compared with 1.5 and 0.8 per cent respectively in Norway and Sweden. Denmark is also the only Nordic country that still maintains control for new rental contracts on dwellings, namely on older dwellings (i.e. those constructed before 1991). It seems without doubt that the Danish housing market is the one that is most "protected" from market forces.

This raises a natural question: Is the Danish housing market inefficient? And how can inefficiencies be detected and eventually compared with inefficiencies on markets in countries where demand and supply are more guided by market forces? More specifically one may look at the following:

• Rent control and administrative distribution of dwellings
• Low imputed rent and untaxed capital gains for owners
• Monopoly power for suppliers on the rental market
• Asymmetric information on housing markets
• Is the Danish real estate market an efficient capital market?

The PhD project does not intent to look deep into all of the above mentioned aspects of efficiency on the Danish housing markets, but will concentrate on some depending on the availability of relevant data. While it will be a part of the project to overview relevant housing market theories with some adaptation for the Danish case, the main emphasis will be on possibilities to demonstrate, by use of available datasets, the implications of Danish housing policy in practise. In doing this, econometric questions will be raised and dealt with. The econometric and empirical investigations are thus expected to take the lion's share of the project.

Emneord

Boligmarked, Boligøkonomi

Faser

Tidsplan

Bevilling

675.000 kr. (Syddansk Universitet medfinansierer projektet med 50 %)

Projektleder

Gintautas Bloze