On July 3-5 the AREUEA held in Amsterdam the 2017 International Conference.
Tatyana Polidi, IUE Executive Director, took part in discussions of keynote speeches delivered by the following leading experts in the field of real estate and urban economics:
David Geltner, MIT Center for Real Estate Real Estate (USA) - Price Dynamics and the Value of Flexibility
Stephan Malpezzi, University of Wisconsin-Madison (USA) - Housing and Urban Development in (mostly Sub-Saharan) Africa: Lessons Learned, Lessons Not Learned
Tsur Somerville, University of British Columbia (Canada) - Trying to Slowdown a Freight Train: An Evaluation of Chinese Macro-Prudential Policies to Slow the Housing Market
John Anderson, University of Nebraska – Lincoln (USA) - Real Estate Ownership and Life Satisfaction in Transition
Christian Hilber, London School of Economics (UK) - On the Adverse Consequences of Constraining Second Home Investments
One of the most rapidly developing new lines of research focuses on evaluation of the effects of macroprudential policies for regulation of the mortgage market introduced by many countries in the aftermath of the 2007 crisis. Accumulation of solid empirical data over a ten-year period gave impetus to the new research.
During the event there have been also presented the findings of a study on evaluation of the effects brought about by the policy for constraining second-home investment and also foreign housing investment designed to cool down the market and stabilize housing prices. In this respect, Tsur Sommerville showed how in Peking the policy resulted in plummeting housing transactions rather than in falling prices, which suggests that the policy appeared to be inadequate. According to Christian Hilber, the use of the policy in Switzerland led to decline in income and to growing unemployment rate in areas with second-home restrictions in place while the initial objective of the policy was boosting the demand for principal residence in the region in order to ensure the increase in municipal revenue from resident taxes.
Using data from the EBRD’s Life in Transition Survey covering 34 countries with a transition economy (including Russia), and based on econometric methods, John Anderson proved that real estate ownership has a big impact on life satisfaction of citizens.
Stephan Malpezzi presented new interesting results of housing market analysis and forecast for countries of Africa, which is the only region that maintains high population growth rates in the medium-term: for example, India and China are already showing a slowdown in population growth. Interestingly, the market trends, including in the field of real estate development and town planning regulation, are similar to those in Russia. For example, in Johannesburg, as in Moscow, the spatial distribution of population density demonstrates a reverse pattern – with the density increasing towards peri-urban areas, rather than the other way round as suggested by a conventional theory and the practice of the cities with a long history of developed market economy.
In his keynote speech delivered at the AREUEA International Conference, David Geltner presented the latest developments by the Massachusetts Institute of Technology (MIT) such as the new development asset value index designed based on the option value theory. According to the speaker, a wider menu of urban land use options results in higher land (option) price. The choice of a development strategy, thus, should not be informed by real estate price indices that underestimate the real price of a new object. As regards the practice of urban development regulation, this is yet another solid argument in favor of the principle of land use zoning that envisages a ‘choice menu’ on the use of land in conformity with land use and development regulations.