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Determinants of House Price Expectations in Europe

Author

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  • Karolis Bielskis

    (Bank of Lithuania)

Abstract

I use data from the European Central Bank’s Household Finance and Consumption Survey (HFCS) to examine how house price expectations differ across Europe and to identify the main drivers of such expectations. During the period 2010-2017, housing-related assets drove the household balance sheet evolution. Therefore, house price expectations remained highly heterogenous across European countries. The paper found that changes in income and house prices are the key determinants of house price expectations. Homeownership status, income and wealth distributions also explain part of the heterogeneity in household expectations about house prices in Europe. All these effects appear to be stronger for renters and for households from the bottom quintiles in income and wealth distributions.

Suggested Citation

  • Karolis Bielskis, 2023. "Determinants of House Price Expectations in Europe," Bank of Lithuania Working Paper Series 112, Bank of Lithuania.
    • Handle: RePEc:lie:wpaper:112
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    More about this item

    Keywords

    house price expectations; housing; household portfolio.;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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