IDEAS home Printed from https://ideas.repec.org/p/arz/wpaper/eres2007_165.html
   My bibliography  Save this paper

Why Are Homeownership Rates So Different Across Europe?

Author

Listed:
  • Christian Hilber

Abstract

Homeownership rates vary considerable across Europe; both across and within countries. Homeownership propensities are high in Southern Europe, in the UK and in Ireland and comparably low in the Alpine countries. Within each country households are much more likely to own outside of large cities. Given the political importance of housing (cost) and homeownership, it is perhaps surprising that to date there is virtually no empirical evidence that sheds light on the puzzle why homeownership rates differ so vastly across Europe. In this paper I exploit the restricted version of the European Community Household Panel (ECHP) to explain household- and regional differences in homeownership propensities and changes over time. I find that the housing stock (i.e., the housing type), which determines the relative landlord production efficiency, is the most important driver of the spatial differences. Differences in tax policies matter as well. The non-taxation of imputed rents for principally owner-occupied dwellings (POOD) has the strongest positive effect on homeownership rates (+3.9%), while the deductibility of mortgage interest for POOD and capital gains taxes that favour POOD have a more moderate impact (+1.9% and +0.5% respectively). Consistent with theory, country differences in housing transaction costs and the expected duration in the property increase homeownership propensities but the effects are rather small quantitatively. While individual socio-economic characteristics are important determinants of individual housing tenure choices, regional differences in the socio-economic composition cannot explain much of the spatial variation in homeownership across Europe.

Suggested Citation

  • Christian Hilber, 2007. "Why Are Homeownership Rates So Different Across Europe?," ERES eres2007_165, European Real Estate Society (ERES).
  • Handle: RePEc:arz:wpaper:eres2007_165
    as

    Download full text from publisher

    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2007-165
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bütler, Monika & Stadelmann, Sabrina, 2020. "Building on a pension: Second pillar wealth as a way to finance real estate?," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    2. Huber, Stefanie J. & Schmidt, Tobias, 2022. "Nevertheless, they persist: Cross-country differences in homeownership behavior," Journal of Housing Economics, Elsevier, vol. 55(C).
    3. Stefanie J. Huber & Tobias Schmidt, 2016. "Cross-Country Differences in Homeownership: A Cultural Phenomenon?," ERES eres2016_47, European Real Estate Society (ERES).
    4. Alexander Daminger & Kristof Dascher, 2020. "City Skew and Homeowner Subsidy Removal," Working Papers 195, Bavarian Graduate Program in Economics (BGPE).

    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arz:wpaper:eres2007_165. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Architexturez Imprints (email available below). General contact details of provider: https://edirc.repec.org/data/eressea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.