Reed, R. (2014), "Examining housing trends in India, China, Denmark and The Netherlands", International Journal of Housing Markets and Analysis, Vol. 7 No. 4. https://doi.org/10.1108/IJHMA-07-2014-0027Download as .RIS
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Examining housing trends in India, China, Denmark and The Netherlands
Article Type: International housing data From: International Journal of Housing Markets and Analysis, Volume 7, Issue 4
This is an analysis of housing markets in India, China, Denmark and the Netherlands. The objective is to provide a comparison between countries experiencing a rapid expansion growth (India and China) with developed countries (Denmark and the Netherlands). The insights are designed to build upon this research and encourage further research into these countries and other housing-related challenges associated with the provision of housing for residents.
One of the fundamental drivers of demand for housing is population growth, amongst other demographic changes including fertility rates, household formation rates, mortality and birth rates, as well as levels of immigration and emigration. Highlighted in Figure 1 are the changes in population density for India between 1901 and 2011. This graph highlights the increased level of urbanisation, as well as the migration of some of the rural population into cities as observed in many countries; there is also an overall increase in the population base. With reference to Figure 1, the density level in urban areas (based on the number of residents/km2) has increased substantially over the past 110 years. The density level in 1901 was 77 residents/km2, however, by 1971 this had doubled to 177 residents/km2. By 2011 the density had doubled again to 382. The absolute change confirms this trend, where in 1991, 2001 and 2011 there were more than 50 residents added to each square kilometre in urban areas in India. These sustained increases in density levels have implications for all residents in the urban areas in India and also present challenges for stakeholders. For example, the government needs to carefully plan how to accommodate the influx of new residents and the effect this may have on demand for safe housing tenure, infrastructure (e.g. roads, water), crime and other associated implications of higher population densities. In addition, there will be interest placed on identifying exactly what is the maximum acceptable level of density for residents. This may require the provision of multi-level higher density housing in certain areas to maximise the use of the limited land resources in urban locations.
Figure 1. Population density 1901-2011 – India
Following on from India with the theme of rapidly expanding countries and the implications for property markets, Figure 2 highlights the growth of investment in real estate investment in China for the eighteen month period between January 2013 and June 2014. This trend has implications for the housing market with reference to the nearby provision of housing for workers in completed commercial real estate developments, as well for real estate developments which include residential land use. It can be observed in the first six months of 2013 there was annual growth exceeding 20 per cent, however, a general downward trend can be observed. A comparison between the January-June 2013 and January-June 2014 periods highlighted a decrease of 6.2 per cent from 20.1 to 14.1 per cent, respectively. This remains a relatively high growth rate in comparative global terms but the relative difference over this 12-month period may have future implications for housing the expanding urban population base unless closely monitored.
Figure 2. Growth of investment in real estate development – China
The price index for property sales in Denmark is presented in Figure 3. This index covers the period between 2010 and 2014 being divided by land use into one-family houses and owner-occupied flats. The largest observed change over this period was the increase in price for owner-occupied flats during the 2nd half and 2012 and 2013, although the index remained relatively unchanged since the first quarter of 2010. Over the corresponding period the price of one family houses has remained generally unchanged, even decreasing slightly over the period of the index. The reasons for higher demand for owner-occupied flats may be linked to higher density trends (e.g. see Figure 2 for example), government incentives, smaller household size or a general acceptance in the market for owner-occupied flats.
Figure 3. Price index for property sales 2010-2014 – Denmark
Figure 4 highlights the relationship in the Netherlands’ housing market between the quantity of house sales and the level of house prices (price index). The time series selected was between 1995 and 2013. Over this 19-year-period a partial cycle can be observed with both indices rising, levelling out, and then falling. Most importantly a lag is evident between the price index and the number of house sales over this period. The number of house sales appears to be a five year leading indicator for house prices, notably both when increasing and decreasing. Although by 2013, the number of house sales was observed at a lower rate than in 1995, the price index in 2013 was similar to the levels in 2002. There has been increasing emphasis placed on housing indexes in recent times, especially to examine the relationship between leading indicators such as the number of house sales in Figure 4.
Figure 4. House sale and house prices 1995-2013 – The Netherlands
The housing markets in the four countries discussed here all different substantially. The population growth in both India and China has been occurring at unprecedented levels and presents many challenges for governments to ensure affordable housing is available. How to plan and construct adequate housing for the residents, both current and future, requires further research.
The data relating to Denmark and the Netherlands has provided an alternative insight into mature markets where arguably a level of partial cyclical change can be observed. However, in a similar manner to all housing markets it is very difficult, albeit practically impossible, to disentangle the many influencing factors which are affecting the supply and demand interaction in these housing markets. Additional detailed and reliable housing data is always required and government is encouraged to make this information both free and readily available to the marketplace.
Deakin University, Melbourne, Australia
National Bureau of Statistics China (2014), available at: http://www.stats.gov.cn (accessed 13 July 2014).
Population Commission of India (2014), available at: http://populationcommission.nic.in (accessed 11 July 2014).
Statistics Denmark (2014), available at: htp://www.dst.dk (accessed 10 July 2014)
Statistics Netherlands (2014), available at: http://www.government.nl (accessed 16 July 2014).
Richard Reed can be contacted at: mailto:firstname.lastname@example.org