Europe is undergoing a profound demographic change. This change will affect significantly all aspects of modern economies including the demand and the prices of the housing stock. The relationship between prices of the housing market and associated demographic variables has been long established. However, in the current literature, the housing market is considered to be unitary and coherent, that is one price reflects the housing stock without taking into account the housing characteristics which in real economy are considered essential for price calculation. To this respect it must be noted that housing submarkets existence has been long established based on the current literature. However and in relation to housing submarkets, the actual goal of the studies currently exist was the definition process, the models and the techniques that should be employed in order to acquire best results. Housing submarkets are considered important in the understanding of different social phenomena. In this chapter an attempt is made to review the relationship of housing prices to demographic variables and then a review on the definition process of housing submarkets.
Capitalism has never flourished except when accompanied by population growth and it is now languishing in those parts of the world where population is stagnant (Longman, P., 2004).
TopFuture Demographic Developments And The Housing Market
There is a growing concern of the future development of the housing market, its prices and the degree of association with the demographic variables (Booth et al., 2000; Boersch – Supan, et al., 2001; Cameron et al., 2005). Housing prices and demographic changes are central in studies and debates surrounding the wealth of the state and the nature of a “healthy society” (Eichholtz, P & Lindenthal, T., 2007; Ermisch, 1996; Glaeser et al., 2004). Ageing population, low fertility rates, increasing immigration are only some developments that are expected to affect the real estate market at a significant degree (Gonzalez, 2005; Haurin et al., 2002; Green & Hendershot, 1996). In addition, the forthcoming retirement of the Baby Boom cohort, has to be added since it is expected to affect all economic aspects, including housing affordability and demand (Mankiw and Weil, 1989; Martin, R., 2005; Brooks, 2000a; Holland A.S., 1991).