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<p>This paper examines the rapid increase of prices in the residential sector of Cluj-Napoca in the context of the housing affordability crisis (Wetzstein, 2017). By using insight from the Growth Regimes literature, we look at the internal demand as a main driver of rapid price rise. As Kohl and Spielau (2018) argue, the monetary conditions needed for export-led growth regimes are restricting the outputs of the construction sector, creating under-supplied, demand-driven housing markets. We propose three alternative hypotheses regarding the major agent driving the prices within the city as major source of demand: the employees in knowledge-intensive services, the diffuse regional savings of employees in search for some yields, the specialized real estate investors. We use OLS and spatial regression (lag and error) to model the price per square meter using the social composition of the neighbourhoods, the within and out-of-town origin of investors, and the source of money (bank loans vs. cash payment) to demonstrate that the existing crisis is driven by the middle class’s savings that also benefits from gentrification, while speculative investments in the housing markets are rather limited.</p>
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This paper examines the rapid increase of prices in the residential sector of Cluj-Napoca in the context of the housing affordability crisis (Wetzstein, 2017). By using insight from the Growth Regimes literature, we look at the internal demand as a main driver of rapid price rise. As Kohl and Spielau (2018) argue, the monetary conditions needed for export-led growth regimes are restricting the outputs of the construction sector, creating under-supplied, demand-driven housing markets. We propose three alternative hypotheses regarding the major agent driving the prices within the city as major source of demand: the employees in knowledge-intensive services, the diffuse regional savings of employees in search for some yields, the specialized real estate investors. We use OLS and spatial regression (lag and error) to model the price per square meter using the social composition of the neighbourhoods, the within and out-of-town origin of investors, and the source of money (bank loans vs. cash payment) to demonstrate that the existing crisis is driven by the middle class’s savings that also benefits from gentrification, while speculative investments in the housing markets are rather limited.

Affordability Crisis and Gentrification in FDI Export-Led Economies: Prices in the Demanddriven Housing Market of Cluj-Napoca

Associate Professor at Babeș-Bolyai University

Studia Universitatis Babes-Bolyai Sociologia

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

This paper examines the rapid increase of prices in the residential sector of Cluj-Napoca in the context of the housing affordability crisis (Wetzstein, 2017)....

Affordability Crisis and Gentrification in FDI Export-Led Economies: Prices in the Demanddriven Housing Market of Cluj-Napoca

Published Online: Aug 23, 2022

Page range: 5 - 36

Received: Jun 01, 2022

Accepted: Jun 25, 2022

DOI: https://doi.org/10.2478/subbs-2022-0001

Keywords
housing demand, housing affordability, growth regimes, knowledgeintensive services, KIS employees

© 2022 Norbert Petrovici et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Affordability Crisis and Gentrification in FDI Export-Led Economies: Prices in the Demanddriven Housing Market of Cluj-Napoca

Published Online: Aug 23, 2022

Page range: 5 - 36

Received: Jun 01, 2022

Accepted: Jun 25, 2022

DOI: https://doi.org/10.2478/subbs-2022-0001

Keywordshousing demand, housing affordability, growth regimes, knowledgeintensive services, KIS employees

© 2022 Norbert Petrovici et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
housing demand, housing affordability, growth regimes, knowledgeintensive services, KIS employees