High vacancy rates and rising house prices: The spanish paradox

摘要

In a 'normal' housing market, one would expect that rising house prices go together with low vacancy rates and vice versa. However, in Spain, this has not been the case. Until very recently, Spain was characterised by strongly rising house prices as well as by a high rate of vacant dwellings. This is the Spanish paradox. This exploratory paper attempts to explain this paradox from a welfare regime perspective. The Spanish welfare and housing system has a number of specific characteristics, such as a political ideology and culture of homeownership, a history of strong rural to urban migration, a large role for the family, and a relatively strict rent regulation and tenant protection. The paper will show that all these characteristics contribute to the Spanish paradox. The paper will also indicate how the Spanish paradox relates to the speculative bubble in the Spanish property sector that has recently burst.