Sales prices, social rigidity and the second home property market

Abstract

Second homes are much valued as recreational resources and also as important commodities on the property market. This study examines the trading patterns and regional price development of Danish second homes from 1992 to 2020. Second home sales volumes and prices reflect the general economic booms and busts and also the possibilities to rent out the property on sharing platforms. However, across regional clusters and over time, property price developments suggest a significant social rigidity in preferences and prospects. The investment and financialization logics and the underlying guiding conspicuous consumption behavior has not changed as an effect of the increased demand during the early phases of the COVID-19 pandemic. When controlling for factors such as house and land plot size, building year, location attractiveness the strong social class and spatial rigidity is reproduced in the data. The shifting of wealth accumulated in the second homes between generations supports the same tendency, and taxation does not rebalance regional effects. Accordingly, only to a limited extent does owning a second home contribute to social equality, even if some second-home owners and policy makers tend to think otherwise. Economic measures in planning and governance portfolios are found to be negligible.