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Paper eres2001_273:
Housing Marketing in Satiated Markets: The Case of Eastern Germany

id eres2001_273
authors Schmoll, Fritz
year 2001
title Housing Marketing in Satiated Markets: The Case of Eastern Germany
source 8th European Real Estate Society Conference (26-29 June 2001) Alicante, Spain
summary Until lately strategic marketing was unknown among housing companies in Germany. Until 1990, the housing market in the Federal Republic was characterised by long phases of shortage, interrupted only by short and spatially limited phases of surplus: almost every empty house could be sold or let. In the GDR housing shortage was prevalent, and the allocation of houses was organised by the authority: marketing was obsolete. After the unification of both German states in 1990, the government strongly promoted and subsidised housing production and renewal. At the same time, the transformation of the industry led to a massive reduction of employment, to migration out of the former GDR, and to high structural unemployment in its industrialised centres. The consequences have been structural vacancies of houses in the respective regions. Housing companies owned by the communities and housing co-operatives founded in the GDR which manage a large stock of housing produced in the GDR are affected in the first place. On behalf of the Federal Government a committee of experts carried out a rather extensive study on problems and possible solutions of structural housing vacancies. The committee suggests, that the state should give subsidies for the destruction of superfluous residential buildings and to tenets who are willing to buy an existing home or flat. The aim is both to reduce housing supply and to direct the means and initiative of owner-occupiers into the improvement of the existing housing stock. The call for governmental subsidies came from the respective housing companies and co-operatives. As far as data and prognoses referring to demography, employment, and purchasing power are reliable, a relatively constant and stable demand in the lower market segments can be expected. But so far the housing companies and co-operatives have not tried to segment their housing supply along the lines of the structure of demand. Moreover, there have been no attempts to trade-mark houses or flats, specialised according to the requirements of the lower market segment, as we know it from other consumer goods. In the opinion of the author, the development of a “low-budget-housing-grand” should be a chance for housing companies and co-operatives in regions of economic transformation and structural unemployment, stabilise their market position. The characteristics, and the emotional connotations of such a brand should become objects of market research. In the conference paper propositions will be made regarding the extent to which practices and experiences of consumer goods marketing can be applied to housing marketing.
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