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A micro view on home equity withdrawal and its determinants: Evidence from Dutch households

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  • Ebner, André

Abstract

For most households, home ownership is the largest wealth component that has become more accessible through innovation and deregulation in mortgage markets. This paper studies the factors driving home equity withdrawal (HEW) at the household level using Dutch survey data. In the Netherlands, house prices were growing fast and mortgage expenses are to a large extent tax deductible. Expectations and perceptions do seem to play an important role in HEW. Withdrawers tend to be more positive about house price developments and – although having lower income – less concerned about their future economic situation. HEW can have a significant impact on both households and the economy, with most of the equity released being reinvested in the housing sector and only a small share used to finance consumption expenditure.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Housing Economics.

Volume (Year): 22 (2013)
Issue (Month): 4 ()
Pages: 321-337

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Handle: RePEc:eee:jhouse:v:22:y:2013:i:4:p:321-337

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Web page: http://www.elsevier.com/locate/inca/622881

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Keywords: Home equity withdrawal; Home equity based borrowing; Housing market; Mortgages; Expectations;

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Cited by:
  1. Lydon, Reamonn & O'Hanlon, Niall, 2012. "Housing Equity Withdrawal, Property Bubbles and Consumption," Research Technical Papers 05/RT/12, Central Bank of Ireland.
  2. Viola Angelini & Peter Simmons, . "Housing Debt and Consumption," Discussion Papers 11/20, Department of Economics, University of York.

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