Flostock News #24
The coming peak in housing production depends on extra capacity
- Capacity keeps output down
The dynamic response of the construction industry to the recent housing crisis in the Netherlands is overproduction, followed by the next crisis. This typical pork cycle can be avoided, we believe, but only if drastic measures are taken. If you are a supplier to the construction industries and you consider investing in extra capacity, we advise you to order the report. If you are in government and you have to make policy decisions in this field, give us a call. If you know someone who is in such a position, please forward this newsletter. See also our article in Cobouw.
Will prices continue to go up?
- Prices have gone up as long as the market was short
The model forecasts the house prices and be aware: it will not be a smooth ride. If you want to know whether you should buy or rent in the coming five years, we advise you to order the report. If you consider a second home as investment, we advise to order the report. If you run a DIY chain, if you are in furniture, cooking equipment or upholstery, we advise to order the report.
In this graph you can see how close the model approaches the actual prices of the last 30 years. The model forecasts prices for the coming 10 -20 years.
Demography drives Construction
- Construction has been waving around the demographic development for more than 100 years
The number of households that are new to the Dutch market annually (red) is the main driver of the construction industry. The construction cycle has been waving (blue) around this household trend for more than a 100 years. Flostock has developed an elegant new technique, together with Eindhoven University of Technology, to model business cycles like this one.
When you know the population trend, you'll know the construction trend. And with Flostock's technique you can create the wave.
Modeling for UK, Germany, France or Belgium
- Other countries in Europe (and the UK) are in planning
We are now adapting the model for other countries, starting in Denmark. We will not be deterred by a possible Brexit. If you want to work with us on the construction markets in other countries of Europe, please give us a call.
Denmark showed us that the principles behind the market are comparable with the situation in the Netherlands. The more countries we do, the better the models will be.
Further modeling
- Dedicated models can be made for segments of the market of for individual suppliers
If you want to know what will happen with your business, if you have to make difficult political decisions about housing, or if you want to determine your mortgage strategy,we can develop a dedicated model for you.
Examples are: big cities versus the country side. Rent versus buying. The effects of reducing the Loan-to-Value or the Loan-to-Income. What is the effect of interest, or of GDP growth?