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The distribution of residential property price changes across homeowners and its implications for financial stability in Austria


  • Nicolas Albacete

    () (Oesterreichische Nationalbank, Economic Analysis Division)

  • Pirmin Fessler

    () (Oesterreichische Nationalbank, Economic Analysis Division)

  • Peter Lindner

    () (Economic Analysis Division)


We employ newly available data of the second wave of the Eurosystem Household Finance and Consumption Survey (HFCS) for Austria to construct a house price index for an analysis of households’ financial resilience to possible price shocks in real estate markets. We estimate this house price index based on directly observed object-level information provided by homeowners. This results not only in an accurate index of house price developments as shown in the seminal contribution of Kiel and Zabel (1999), but also allows us to analyze the full distribution of house prices and their changes beyond the mean. We compare our approach to the two other price indices available in Austria, which use hedonic regressions based on transaction or quotation prices, and discuss advantages and disadvantages of the available indices while focusing on our primary objective, analyzing implications for financial stability. We find that the fairly steep increase of house prices recently observed has been driven by a rather small segment of the market. Further results suggest that the observed long-term real estate price increases have been remarkably stable. At the heart of our contribution is an analysis of the impact of house price changes on the loss given default of vulnerable mortgage holders. We base this analysis on scenarios that incorporate the observed empirical distribution of house price changes and show that the risks to financial stability are relatively limited. We conclude with a summary of the findings and provide a general assessment of the Austrian housing market.

Suggested Citation

  • Nicolas Albacete & Pirmin Fessler & Peter Lindner, 2016. "The distribution of residential property price changes across homeowners and its implications for financial stability in Austria," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 31, pages 62-81.
  • Handle: RePEc:onb:oenbfs:y:2016:i:31:b:1

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    Cited by:

    1. Kelly, Jane & Le Blanc, Julia & Lydon, Reamonn, 2018. "Pockets of risk in European Housing Markets: then and now," Research Technical Papers 12/RT/18, Central Bank of Ireland.
    2. repec:bis:bisifc:46-12 is not listed on IDEAS
    3. repec:onb:oenbfs:y:2018:i:35:b:3 is not listed on IDEAS
    4. repec:onb:oenbfi:y:2017:i:2:b:1 is not listed on IDEAS
    5. Pirmin Fessler & Peter Lindner & Martin Schürz, 2016. "In focus: Eurosystem Household Finance and Consumption Survey 2014 – first results for Austria (second wave)," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 34-95.
    6. repec:onb:oenbfs:y:2017:i:33:b:1 is not listed on IDEAS
    7. Kelly, Jane & Le Blanc, Julia & Lydon, Reamonn, 2019. "Pockets of risk in European housing markets: then and now," ESRB Working Paper Series 87, European Systemic Risk Board.
    8. repec:nbb:ecrart:y:2017:m:june:i:i:p:61-77 is not listed on IDEAS

    More about this item


    household-specific property prices; mortgages; banking sector; Austria;

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets


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