1Germany is one of the Western European countries where the effects of demographic change are most apparent (Kröhnert et al. 2008). The implications of a massive out-migration in East Germany after the reunification offered a promising field for analysing shrinkage (Oswalt 2005; Oswalt 2006; Oswalt and Rieniets 2006). In contrast, West Germany seemed to not have been affected by the shrinkage, and the stock of single-family housing (SFH) in particular was self-selling. Despite this outlook, recent research suggests that in peripheral regions of West Germany SFH neighbourhoods are prone to decay due to changed socio-economic and demographic trends (Aehnelt 2008; Hahne 2008; Spehl 2011; Buzar et al. 2005; Buzar et al. 2007). Notably, the implications of recent in-migration in Germany due to the refugee crisis is not yet clear, but a safe assumption is that the demand for dwellings will increase, particularly in major cities, resulting in a persisting polarization between central and peripheral regions (Braun and Simons 2015; SZ-online 2015).
2This briefing examines whether the conditions leading to an oversupply of SFH in peripheral West German regions can also be observed in other North-West European countries. First, this report sums up the main results from comprehensive research on behalf of the Wüstenrot Stiftung (section 2); then it describes demographic trends (section 3) and the characteristics of the single-family housing stock (section 4) in selected North-West European countries. The conclusion (section 5) suggests case study research to examine country-specific implications for the SFH stock in the affected regions in greater depth.
3Previous empirical research (Wüstenrot Stiftung 2012; Berndgen-Kaiser et al. 2014) examined challenges for mature post-war housing estates in West Germany and identified regions with a high probability of oversupply. This was based on the assumption that a mismatch would occur if a large number of the SFH built by baby-boomers in the three decades after World War II were to enter the market (due to the advancing age of their owners) and meet with regionally declining demand (due to a drop in family households and a continuing population decline). The results show that the risk of housing oversupply is confined almost exclusively to suburban and rural areas, especially to peripheral regions along the borders and the former iron curtain (Wüstenrot Stiftung 2012: 30).
4In this study, 29 SFH neighbourhoods in 14 municipalities provided insights into local awareness of the situation in SFH neighbourhoods. The results indicate that, so far, neither relevant vacancies of SFH nor social destabilization can be observed. The share of second owners (55%) compared to original owners (45%) who answered a survey (n=586) conducted within the project shows that a generational change in the post-war SFH stock is well advanced. By the time of the survey (2011), real estate prices for SFH in the 29 cases were stable or slightly falling, with local authorities and real estate managers interpreting this as market adjustments and not as an indicator of a structural crisis. Despite this, both groups expected future problems in the reuse of SFH, especially in peripheral neighbourhoods (Wüstenrot Stiftung 2012: 220). Subsequently, the report identified a set of possible policies and action measures to aid local authorities in particular in the promotion and adaptation of older detached housing estates.
5Whether similar implications for the SFH stock can be described in other West European countries is the focus of the following sections.
6To explore this research question, the team compared figures (mainly Eurostat data) from Belgium, France, Netherlands and United Kingdom (UK)) to data from Germany. The authors acknowledge the existence of limitations regarding European statistics for the research question, especially demographic and economic data and housing preferences, which often are not available for smaller regions (as NUTS 3).
7The population development from 2010 to 2014 in Belgium (+3.4%), the UK (+3.0 %), France (+1.8%), and the Netherlands (+1.5 %) shows an upward trend, while Germany displays a declining trend (-1.3 %). On a NUTS 3 level population shrinkage could be verified for all studied countries except Belgium. The highest population decline in France was observed in Nièvre (-2.4%) in the Bassin Parisien, in the Netherlands in Delfzijl (-2.4%) in Noord-Holland, and in the UK in West-Cumbria (-1.0%) in North-West England (for some UK regions there are no complete time series data available). However, no region’s figures appear to be as dramatic as those found in some German regions (e.g., Suhl in Thüringen, -9.8%).
Fig. 1: Population development from 2010 to 2014 on NUTS 3 level
Source: Authors’ own map based on Eurostat data (2014)
8Projections (Eurostat 2014) predict a stagnating population growth in Germany until 2040 and further a slow decrease. In the Netherlands, the population will grow until 2040 and then also slowly decline. In Belgium, France, and the UK, a continuous population growth is expected until 2060.
9With the post-World War II baby-boom generation coming into retirement age, Europe in general is affected by the ageing of its societies. The old-age dependency ratio measures the ratio between the working-age population and elderly persons. Figure 2 shows an extreme growth of the percentage of elderly people until 2060 in all studied countries, with the Netherlands and Germany being affected the most. The percentage increase in Belgium, the UK, France and the Netherlands is significant but below the EU-28 average.
Fig. 2: Old-age dependency ratio for 2015 compared to 2060 projections
Source: Authors’ own graph based on Eurostat data (2014)
10The number of households has increased between 2010 and 2014 in all studied countries as well as at EU-28 levels. This corresponds to the number of persons per household. For the EU-28, on average, it decreased from 2.4 to 2.3 between 2010 and 2014. In Germany, it declined from 2.1 to 2.0 and is currently at the lowest level compared to the other four countries, followed by the Netherlands, with 2.2 persons per household. Belgium displays the highest value, with a constant 2.4 persons per household, and France and UK also show stable figures at 2.3 (according to Eurostat 2014).
11The economic situation is supposed to have a great impact on the demand for single-family houses. As an indicator, the gross domestic output (GDP) from 2000 to 2014 was examined in relation to the EU-28 average (Ø EU 28 countries = 100%). As this indicator shows, all countries except Germany display a lower GDP in 2014 than in 2000. While unemployment rates in the EU-28 increased from 9.6 to 10.2 % from 2010 – 2014, national and regional rates differ extremely. In Germany and the UK, they decreased significantly from 7.1 to 5.0 (Germany) and 7.8 to 6.1 (UK), with some regions reaching nearly 50 % of the 2010 rates. In Belgium, unemployment remained stable at 8.3 to 8.5 percent. In France, figures slightly increased from 9.3 to 10.3 percent, with central, rural and peripheral regions in the North and East of the country being most affected. The Netherlands has had to face by far the highest increase in its unemployment rate. With an increase from 4.5 to 7.4 percent, it is at the highest rate in thirty years, with this rate doubling in some provinces (Zeeland and Flevoland; Eurostat 2014; own calculations).
12The following section contains a short characterization of the SFH stock in the five countries.
13Belgium, which underwent massive suburbanization after World War II, has always stimulated homeownership by tax incentives. The result is that single-family houses became the dominant building type in residential subdivisions in the form of ribbon or piecemeal developments scattered throughout the landscape. Approximately 80% of the population lives in owner-occupied houses (Heynen 2010; Meeus and De Decker 2012; Bervoets and Heynen 2013).
14In France, 56% of residents live in single-family detached houses, which are considered to be the ideal home by almost 90% of the population (Rodriguez 2006). Globalization has led to a growing imbalance among urban territories with areas that have not been able to connect to information networks being affected by decline (Castells 2000). Although, on a national level, France has been unaffected by population decline since 1991, a third of French urban areas have experienced shrinking between 1990 and 1999 (Cunningham-Sabot and Fol 2009: 18).
15In the Netherlands, up to 60% of the post-war era housing was built by public initiative. Most dwellings fit tidily with the planned logic of compact villages and urban extensions. Fiscal instruments such as the Hypotheekrenteaftrek (tax rebate on mortgage interest) are described as an engine for the development of the housing market (Niessen 2015). This rebate allows for private homeowners to deduct the interest of the mortgage from their personal tax payment. This policy has led to the practice that homeowners did not try to reduce their credit by covering the house price through equity capital. Due to the crisis in 2008, many houses are currently overrated and can neither be sold nor further developed (Centraal Bureau voor Statistiek 2014).
16Traditionally, in the UK, the share of owner-occupied housing is high (63% in 2014). In 2014 in England, 77% of the population owned a house built before 1981, the share of houses built in the post-World War II period until 1980 was 39%. Only 23% of houses were built after 1981. The age of the stock corresponds to the age of owners, with 34% who are 65 years of age and older. As a general trend, a growing demand can be noted, resulting in increasing house prices.
17Figure 3 shows the current shares of dwelling types for the five countries and on the EU-28 level.
Fig. 3: Proportion of population by dwelling type
Source: Authors’ own graph based on Eurostat data (2014)
18The highest share of SFH (detached as well as semi-detached) can be found in the UK (86%), followed by Belgium (79%), the Netherlands (77%) and France (67%), whereas Germany displays the lowest share (45%) in detached and semi-detached houses. The EU-28 share of detached and semi-detached houses amounts to 58%.
19The five countries differ with regard to ownership as well. Belgium presents the highest ownership rate of 72%, followed by the UK, with 68%. The Netherlands and France are in third and fourth place, with ownership rates of 67% and 63%, respectively. Germany displays the lowest share of homeowners, with slightly more than half of the population owning a property (53%).
20The preceding data analyses suggest that, except for Germany, the populations in the four studied countries are growing slightly, but economic conditions in Europe are somewhat deteriorating. However, this development differs from country to country and from region to region within these countries. On the one hand, Germany, which is the country most affected by the population decline, has by far the lowest share of single-family houses. On the other hand, although Germany has been relatively economically strong during the last decade in comparison to the other four countries, a mismatch might occur as supply and demand do not match in peripheral regions. As a consequence, many single-family housing estates will have to face a loss in value or will not find buyers at all resulting in increasing vacancies. West German funding policies supported homeownership for decades as a means of old-age security. Should the sales revenues from a house be insufficient to fund an elderly friendly housing, the state has to step in with his fiduciary duty (Zakrzewski et al. 2014: 288). In addition, any vacant housing leads to lower revenues and create higher infrastructure costs for the municipality.
21In Belgium, France, the Netherlands and the UK, an emerging mismatch between supply and demand in older single-family housing estates is not perceptible in general, but some demographic and economic factors foretell a growing mismatch, especially for the next decades. Given the high share of SFH in North-West EU countries, SFH stock in regions with a demographic decline combined with an economic downturn might be seriously affected in the future. For example, the vacancy rate of detached houses in the Netherlands, which is currently under 4 %, is not viewed as a serious problem. However, the implications of the recent notable increase in unemployment rates should be taken seriously (Centraal Bureau voor Statistiek 2013). Recent research in Germany suggests that preventive measures at an early stage may avoid undesirable developments on a large scale (Wüstenrot Stiftung 2012). Possible advancement options are ranging from a) “stabilisation”, which means the preservation of the current structure and function of the neighbourhoods and the revaluation to enable aging well in place and b) “qualification”, which means upgrading to attract new user groups up to c) “restructuring”, which means demolition and substitution by new buildings with favoured dwellings or conversion to other uses. This report should be considered as a starting point for further research on more qualitative investigations of the commonalities and distinctions and the country-specific features of the single-family housing stock, to develop instruments that enable proactive measures.