#HEDONIC PRICING MODEL FREE#
It is in the non-regulated market that investors can enjoy the benefits of free renting market. Due to the governmental control in the regulated sector, investors have limited control over rent prices. This is mainly because non-regulated rental housing is more lucrative. In particular, private investors tend to invest in new urban areas because in most these dwellings are either non-regulated or are likely to be deregulated later (source). Commercial investors are turning their attention to rental apartment blocks mainly because they have low management costs and vacancy risks. These factors include “improved market conditions, bottomed-out house prices, attractive risk-return ratio, stable income returns and an increasing shortage on the residential real estate market” (same source). This increasing interest can be ascribed to a number of socio-economic factors (source). The increasing interest in the Dutch rental housing is the most remarkable shift in the housing market in the last decade (source). Apart from the 2008 crisis, the participation of the private sector in the rental market has been facilitated also by the tendency of the government to encourage the non-regulated housing sector. 50 % of the rental market is now dominated by private investors.
According to (same source), the Dutch rental market makes up 40 % of the total housing stock. During the crisis, the returns from the housing market dropped to its lowest levels and the housing association started selling a significant part of their residential blocks, both regulated and non-regulated (source). More than 85 % of the market was under the control of the Dutch Housing associations (source). Prior to the crisis of 2008, the presence of private investors in the housing market was insignificant. The Dutch Housing market was badly hit by the 2008 crisis. The housing market is easily affected by socio-economic changes, such as demographic changes, income development, consumer behavior, and price fluctuation. This has had significant implications for the private investors and the Dutch Housing associations alike. This recovery was marked by private investors making their entrance for the first time into the Dutch rented housing market. The report indicates that the rental housing market in Holland started to witness a steady recovery following the housing market crisis of 2008. The same report indicated that local investors were to invest €2 billion in rented housing (twice the amount invested by international investors). According to a report published by Capital Value-an advisory firm in the field of real estate- there were more than 200 international investors ready to invest in the residential housing market in 2014 (Capital Value, 2014). As of 2014, there has been an unprecedented interest in the Dutch housing market from national and international investors alike.
The market offers valuable opportunities for private investors. Over the last decade, there has been a growing investment rate in the Dutch rental housing market. Private Investment in the Dutch Rental Housing Market Paper length: 3000 words (equally distributed between the 8 parts)ġ.1. However, you have to use different data for the regression model. The paper is mostly a re-writing of another thesis.
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