Impact of Economic Crisis on the Intention to Move House

Abstract

As a result of the economic crisis in 2008, the price of petrol, goods and agricultural products has rapidly increased and cities all over the world started to suffer from high levels of unemployment and lower business survival rates. Due to the economic downturn, the Dutch housing market also started to weaken in 2008. Moreover, it became more difficult to obtain mortgages and loans from the banks. As a result of these processes, housing prices dropped substantially, the percentage depending on housing type, location and market. To better understand underlying processes, it is of interest to examine the effects of the economic crisis on housing choices, particularly because housing choices impact other long-term choices such as employment and short-term decisions such as where activities will take place in the city. In this paper, we discuss the results of a model of households’ intentions to move house, comparing the situation before and during the economic crisis. We investigate whether housing expenditures influenced the probability of the intention to move. For that purpose, we use the Dutch Housing Survey (WoningOnderzoek) from 2006, 2009 and 2012. This data contains information about households’ willingness to move within the next two years. We applied mixed binary logit analysis on the intention to move or not. The findings show that socio-demographics, house characteristics and the year of the questionnaire influence the intention to move. Moreover, income, housing expenditure and house ownership, which indicate economic constraints, affect the intention to move during the crisis.