Vermelding onderdeel organisatie June 20, Economics and ownership of real estate A conceptual analysis Grange over-Sands/COST Action G9, Working Group No 3 Maarten Ottens Faculty of Technology, Policy and Management, Department of Philosophy

June 20, What economics do I consider? Where money or valuation in monetary units is involved Where is money or valuation in monetary units involved? What determines the value, inherent value?

June 20, Where do economics come in? Owner Social institution(s) Real estate Ownership of real estate, a threefold relation, because no ownership without enforcement

June 20, Where do economics come in? 1.Owner - has to pay 2.Real estate - the physical structure - has value 3.Social institution - processes - costs money

June 20, Processes Enforcement of ownership Change of owner, real estate, rights etc. Most processes are institutionalized, caught in rules as are the costs. Some are based on conventions, unwritten rules Costs real estate agents in the Netherlands Related to value of real estate (%)

June 20, Structure Real estate is free market, but based on conventions Conventions are so strong that sometimes institutionalized (NHG)

June 20, Structure, processes, valuation Value/costs ofstructureprocesses institutionsconventionsbased on

June 20, What determines the value? What do people find important? Location (distance to work, shops, recreation facilities) Size (of the building(s), surface) Quality (building, soil) Aesthetics (kind of building, surroundings)

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June 20, Location Global: Differences between countries (economic and social systems) National: Differences within countries (urbanization) Local: Differences within local areas e.g. cities (neighbourhoods)

June 20, Some final thoughts Importance of location changes with means of transport External influences (natural disasters, global warming) Influencing real estate pricing is difficult, land/urban planning seems best option, make areas attractive Improve processes to reduce costs