Housing demand: Quo vadis?

Abstract

One of the major issues of political and social discussion in Catalonia and Spain in recent years has been the malfunctioning of the housing market. I suggest that there are several explanations of demographic origin for this. First, there is a growing mismatch between the demographic demand for housing and the new supply available. I estimate that in the period 2014-2020 the Catalan household stock increased by 222 thousand units to 3.1 million, while only 50 thousand dwellings were completed. In 2019, the deficit of new housing, measured as the difference between net household growth and completed dwellings, was 35 thousand. Second, demographic demand is no longer stable but cyclical and uncertain. In 2013 some 9 thousand households were added to the stock and, in 2019, 45 thousand. Similar mismatches are happening in Spain as a whole. In this issue of Perspectives Demogràfiques, I show how the distribution of the demographic components of demand has changed, tending to a greater weight of less stable factors like immigration, which accounted for 93% of net household growth in 2019, or the evolution of household structure, which explained more than 10 thousand additional households per year in the early 2000s. Next, I draw attention to the housing supply-demand mismatch mainly associated with changes in immigration. Finally, I suggest that one of the main challenges of applied demography is how to contribute towards new housing policies that consider the cyclical impact of conjunctures, non-linearity of trends, and uncertainty.