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Real Estate Supply Structure and Unemployent

Real Estate Supply Structure and Unemployent. Ing. David Slavata, Ph.D. VŠB-TU Ostrava Faculty of Economics Czech Republic. Basic Idea. Discussion with students Are the countries with a high share of homeownership richer? Is rental housing suitable only for poor?

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Real Estate Supply Structure and Unemployent

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  1. Real Estate Supply Structure and Unemployent Ing. David Slavata, Ph.D. VŠB-TU Ostrava FacultyofEconomics Czech Republic

  2. Basic Idea • Discussion with students • Are the countries with a high share of homeownership richer? • Is rental housing suitable only for poor? • Should the governments support homeownership? • Housing policy of Great Britain of 90 ´s, USA 2008, Eastern Europe of 90 ´s

  3. A. Oswald – The Housing Market and Europe´s Unemployment, 1999 • Low level of employment mobility of families in home ownership • Low level of regional development due the ownership clubs, who restrict technical infrastructure development.

  4. Researchquestions • Is there any economical relationship between numbers of adverts in newspapers and economical and political events? • Does the unemployment affect the share of flatsready for rent? • Is it possible to estimate unemployment by changing the share of rental dwellings in the market

  5. AdvertisementsAnalysis • Lidové Noviny from 28.2.1893 – 1.4.1945 • 312 newspapers • 5000 adverts were recorded • Recalculated as average to avoid seasonal fluctuations • To avoid identical advertisements the duration between searched edition was two months • The adverts were sorted into homogenous groups

  6. GeneticCodeofthe Real Estate Market – 51 years CZECHOSLOVAK REPUBLIC I WW Emigrat. G D II WW HABSBURG EMPIRE

  7. Themainsegmentsofrealestate market in 20 ´s and 30´s in Czechoslovakia • Flatsfor rent • Multiflathousesforsale • Farmhousesforsale • Familyhousesforsale

  8. Statistical estimation • Descriptive statistics • Pearson correlation coefficient • Ordinary least squares

  9. Timeshiftsbetweenunemployment and structureofhousing market

  10. ConfirmationofOsvald'spostulate: Employment mobility in rentalsectorissignificantly sensitive, whilethe mobility in familyhousing segment isinconclusive.

  11. New postulate: The share of rental sector predates future level of unemployment.

  12. Explanation • Maximization of tenant´s benefit • If the tenantloseshis joband is not able to find comparable, he leaves current rented flat • He maximizes his benefit if the day when leaves rental flat is his last day to have job. • Notice period (for rental agreement and for job agreement) force tenants to start the negotiation in advance (contract economy – Holmstrom, Hart)) • Maximization of landlord´s benefit • If he isinformed in advance the tenant will release the flat, he offers flat for rent it does not matter if it is still occupied.

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