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Housing Finance of Austrian Households

Author

Listed:
  • Nicolas Albacete

    (Oesterreichische Nationalbank, Economic Analysis Division)

  • Karin Wagner

    (Oesterreichische Nationalbank, Economic Analysis Division)

Abstract

This study presents a first summary of the housing finance results of the OeNB’s Household Survey on Housing Wealth in Austria. 22% of Austrian households have taken out debt to finance housing. The probability of holding such debt is significantly higher for younger and higher-income households than for others. High-income households are much more likely to have a variable rate loan or a foreign currency loan, but at the same time they also have lower loan-to-value (LTV) ratios than the other groups. Regional differences – or more specifically, a west-east pattern – were identified regarding the type and amount of debt incurred: Austrian households in the western provinces tend to have higher debt and higher LTV ratios than those in the eastern provinces. Housing assistance funds and alternative forms of financing, such as inheritances or inter vivos gifts (money), play quite a significant role in housing finance. Austrian households use their property mainly for residential purposes rather than as an investment instrument: Of the households with outstanding housing loans, 74% used (at least part of) the money to purchase their primary residence, 12% used it to finance the deposit they had to make for their housing association apartment and 17% purchased a second home. 52% of the households that took out a loan to purchase a second property use it for residential or similar purposes, while 26% of them offer it for rent and the remaining households (roughly one-quarter) use it as a store of value. These facts and the existence of a strongly subsidized rental market seem to have contributed to the rather low ownership ratio and the moderate development of Austrian real estate and rental prices by international standards. The differences identified in the structure of housing finance of Austrian households suggest that the impact of monetary policy on wealth (and hence on household consumption and investment) will also differ markedly.

Suggested Citation

  • Nicolas Albacete & Karin Wagner, 2009. "Housing Finance of Austrian Households," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 62-92.
  • Handle: RePEc:onb:oenbmp:y:2009:i:3:b:4
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    File URL: https://www.oenb.at/dam/jcr:7d426b06-ab08-48ce-a1f6-17d8f26b2981/mop_2009_q3_analyses04_tcm16-143521.pdf
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    Citations

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    Cited by:

    1. Karin Fischer & Rauf Gönenç & Robert Price, 2011. "Austria: Public Sector Inefficiencies Have Become Less Affordable," OECD Economics Department Working Papers 897, OECD Publishing.
    2. Martin Schneider, 2013. "Are Recent Increases of Residential Property Prices in Vienna and Austria Justified by Fundamentals?," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 29-46.
    3. Nicolas Albacete & Peter Lindner, 2017. "Simulating the impact of borrower-based macroprudential policies on mortgages and the real estate sector in Austria – evidence from the Household Finance and Consumption Survey 2014," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 33, pages 52-68.
    4. Heike Joebges & Sebastian Dullien & Alejandro Márquez-Velázquez, 2015. "What causes housing bubbles?," IMK Studies 43-2015, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    5. Heike Joebges & Sebastian Dullien & Alejandro Márquez-Velázquez, 2015. "What causes housing bubbles? A theoretical and empirical inquiry," Competence Centre on Money, Trade, Finance and Development 1501, Hochschule fuer Technik und Wirtschaft, Berlin.
    6. Pirmin Fessler & Peter Mooslechner & Martin Schürz & Karin Wagner, 2009. "Housing Wealth of Austrian Households," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 104-124.

    More about this item

    Keywords

    household’s wealth; real assets; housing finance;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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