Search

In this chapter, we focus on office vacancy. In the past decade, there has been a considerable increase of the availability of offices in the Amsterdam region. In 1999, the actual vacancy was close to zero. By now, supply of offices is approaching 20 % of total stock. In many areas, it is already over 25 %. Even more important, the vacancy rate of newly built offices is still low, while structural vacancy of older offices is soaring. Various authors assume that vacancy is a temporary mismatch between supply and demand. However, in Amsterdam a permanent tendency to oversupply exists which is related to the institutional structure of the market. Economic, financial and spatial policy pursued by municipalities in the Amsterdam region favour the construction of new offices. Investors have been willing to acquire all newly built offices. An addition to existing theory enabling us to explain these developments. Almost all parties involved gain from new office construction. New developments give rise to a filtering down process on the office market. As soon as this process has resulted in the existence of two separate markets of new and older offices, the mechanism that restores equilibrium is no longer effective. As a consequence, in this situation, office vacancy has no limit.

This paper analyses the effect of uncertainty on investment spending. We analyse twotypes of investment, i.e. aggregate investment and investment in energy saving technologies,using subjective evaluations of expectations and uncertainty of Dutch firms in 1997. Weestimate several models distinguishing between small and large firms. The results suggest thatinvestments in energy saving technologies in small firms are largely cost driven, whereas inlarge firms they are an integral part of general investment spending. Furthermore, expectationsand uncertainty have important although different effects on investment spending in small andlarge firms. We find evidence, at least for small firms, that there are important differencesbetween the effects of uncertainty around input and output variables.

This paper extends previous literature on variations in mobility rates across local housing markets by examining the linkage of mobility rates at the household level to the structure of local housing markets. The results indicate that residential mobility rates differ widely across local housing markets, substantiating the view that residential relocation is intimately intertwined with conditions at the local level. Local housing market conditions also have different effects on mobility rates for renters and owner-occupiers. The results show that variation in residential mobility rates across housing markets can be partly explained by level of urbanization, the tenure structure, the degree of government intervention, and the size of the housing market. Remarkably, these differences in local housing markets cannot be seen to be related to housing market features only. The results suggest that differences can also be attributed to the behavior or attitude of households with respect to housing.

As is well known housing has a unique set of characteristics which interact to cause the operation of the housing market to be significantly different from that of other markets. On the demand side individuals have to search for vacancies and its characteristics. Due to the high dimensionality of housing considerable search costs are involved. On the supply side, complicated interactions exist in the housing market whereby frictions occur frequently. In the labour market similar behaviour has been explained with search and matching models, where vacancies and turnovers are explicitly considered. Wheaton (1990) remarks that these search and matching models from the labour market would seem particularly applicable to housing. In this paper we formulate an equilibrium search model of the housing market that deals with search and prices. We beleive that an equilibrium searchmodel could be an important step forward into the analysis of vacancies and residential search. Using this framework we formulate an empirical model for the Dutch housing market.