Real Estate Economics

URL study guide

https://studiegids.vu.nl/en/courses/2024-2025/E_STR_REEC

Course Objective

For households, housing is the most important consumption good, often taking a large share of total expenditure. The decision to purchase a house is among the largest financial decisions in their life, in which both consumption and investment motives play a role. For investors, real estate forms one of the most illiquid income-generating assets in their portfolio. The course provides an overview of the field of real estate economics. It aims to deepen your knowledge and understanding of real estate markets by discussing the academic literature in finance and economics, focusing on the main elements of the field and on policy-relevant issues. We will address big societal questions about affordability and sustainability and link them to the public debate. The connections between real estate markets and the wider economy, environmental issues and spatial planning will also be studied.

Course Content

The course covers micro
- as well as macroeconomic and finance aspects, and residential as well as commercial real estate. Attention will be paid on search and matching issues and price formation. The durability of real estate facilitates the possible separation between ownership, which leads to issues of tenure choice. The design of buildings has important implications for pollution of greenhouse gases and the use of materials. The fixed location of buildings implies the capitalization of local public goods in its price. Housing is the largest expenditure category and for owners the house is often the dominant asset, implying a close connection between real estate markets and the wider economy. The relationships between real estate markets and urban planning will be explored. Students will be introduced to the CPB housing model used to assess housing policies. In a group assignment students will analyse housing policy measures in a real world setting on the basis of this model. Another assignment addresses the 'four quadrants' and the matching of houses and households.

Teaching Methods

Lectures, tutorials.

Method of Assessment

Assignments, written exam.

Recommended background knowledge

- Microeconomics
- Econometrics / quantitative research methods