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Drivers of Homeownership Rates in Selected OECD Countries

Author

Listed:
  • Dan Andrews

    (OECD)

  • Aida Caldera Sánchez

    (OECD)

Abstract

Homeownership rates have increased significantly in many OECD countries over recent decades. Using micro-econometric decomposition techniques, this paper shows that part of this increase can be explained by changes in the characteristics of households, including age, household structure, incomes and education. Nevertheless, a significant portion of the change in homeownership rates remains unexplained by shifts in household characteristics, leaving a potential role for public policy in explaining developments in homeownership rates. Panel estimates suggest that the relaxation of down-payment constraints on mortgage loans has increased homeownership rates among credit-constrained households over recent decades, resulting in a rise in the aggregate homeownership rate that is comparable to the impact of population ageing. In countries where tax relief on mortgage debt financing is generous, however, the expansionary impact of mortgage market innovations on homeownership is smaller. This is consistent with the tendency for such housing tax reliefs to be capitalised into real house prices, which may crowd-out some financially constrained households from homeownership at the margin. The impact of housing policies regulating the functioning of the rental market, such as rent regulation and provisions for tenure security, on tenure choice is also explored. Les déterminants du taux de propriété immobilière dans les pays de l'OCDE Les taux d'accession à la propriété immobilière ont augmenté de façon significative dans de nombreux pays de l'OCDE au cours des dernières décennies. En utilisant des techniques micro-économétriques, cette étude montre qu'une partie de cette augmentation est expliquée par des changements dans les caractéristiques des ménages, y compris l'âge, la structure du ménage, les revenus et l'éducation. Néanmoins, une part importante de la variation des taux d'accession à la propriété ne s’explique pas par des changements dans les caractéristiques du ménage, ce qui laisse un rôle potentiel aux politiques publiques pour expliquer l'évolution des taux d'accession à la propriété. Des estimations de panel suggèrent que l'assouplissement des conditions d’apport pour les prêts hypothécaires a augmenté les taux d’accession à la propriété parmi les ménages en butte à des contraintes de crédits, entraînant un effet sur les taux d' accession à la propriété globale comparable à l'impact du vieillissement de la population. Dans les pays où des allégements d’impôt sur le financement de la dette hypothécaire sont généreux, cependant, l'effet expansionniste des innovations sur le marché hypothécaire sur l'accession à la propriété est moindre. Ceci est cohérent avec la tendance pour ces dégrèvements fiscaux à être capitalisées dans les prix réels des logements, ce qui peut évincer, à la marge, certains ménages en difficulté financièrement à l’accession à la propriété. L'impact des politiques du logement qui régissent le fonctionnement du marché locatif sur le mode d'occupation est également exploré.

Suggested Citation

  • Dan Andrews & Aida Caldera Sánchez, 2011. "Drivers of Homeownership Rates in Selected OECD Countries," OECD Economics Department Working Papers 849, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:849-en
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    File URL: http://dx.doi.org/10.1787/5kgg9mcwc7jf-en
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    Cited by:

    1. European Commission, 2012. "Tax reforms in EU Member States - Tax policy challenges for economic growth and fiscal sustainability – 2012 Report," Taxation Papers 34, Directorate General Taxation and Customs Union, European Commission.
    2. Hanna Augustyniak & Jacek Łaszek & Krzysztof Olszewski & Joanna Waszczuk, 2013. "To Rent or to Buy – Analysis of Housing Tenure Choice Determined by Housing Policy," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 33.
    3. Michael Ziegelmeyer, 2015. "Other real estate property in selected euro area countries," BCL working papers 99, Central Bank of Luxembourg.
    4. European Commission, 2013. "Tax reforms in EU Member States - Tax policy challenges for economic growth and fiscal sustainability – 2013 Report," Taxation Papers 38, Directorate General Taxation and Customs Union, European Commission.
    5. Cussen, Mary & O'Leary, Brídín & Smith, Donal, 2012. "The Impact of the Financial Turmoil on Households: A Cross Country Comparison," Quarterly Bulletin Articles, Central Bank of Ireland, pages 78-98, April.
    6. repec:nbp:nbpbik:v:48:y:2017:i:2:p:197-234 is not listed on IDEAS
    7. Clara Mulder & Caroline Dewilde & Mark Duijn & Annika Smits, 2015. "The Association Between Parents’ and Adult Children’s Homeownership: A Comparative Analysis," European Journal of Population, Springer;European Association for Population Studies, vol. 31(5), pages 495-527, December.
    8. Caroline Dewilde & Bram Lancee, 2012. "GINI DP 32: Income Inequality and Access to Housing in Europe," GINI Discussion Papers 32, AIAS, Amsterdam Institute for Advanced Labour Studies.
    9. Wieser, Robert, 2012. "Stabilising and Destabilising Factors in 14 EU Housing Markets," MPRA Paper 65823, University Library of Munich, Germany.
    10. Figari, Francesco & Paulus, Alari & Sutherland, Holly & Tsakloglou, Panos & Verbist, Gerlinde & Zantomio, Francesca, 2012. "Taxing Home Ownership: Distributional Effects of Including Net Imputed Rent in Taxable Income," IZA Discussion Papers 6493, Institute for the Study of Labor (IZA).
    11. Thomas A. Stephens & Jean-Robert Tyran, 2016. "Money Illusion and Household Finance," Discussion Papers 16-14, University of Copenhagen. Department of Economics.
    12. Margarta Rubio, 2014. "Rented vs. Owner-Occupied Housing and Monetary Policy," Discussion Papers 2014/09, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    13. Cenkhan Sahin, 2016. "Macroeconomic effects of mortgage interest deduction," DNB Working Papers 514, Netherlands Central Bank, Research Department.
    14. Riccardo Calcagno & Maria Cesira Urzi Brancati, 2014. "Do more financially literate households invest less in housing? Evidence from Italy," Economics Bulletin, AccessEcon, vol. 34(1), pages 430-445.
    15. European Commission, 2011. "Tax Reforms in EU Member States 2011: tax policy challenges for economic growth and fiscal sustainability," Taxation Papers 28, Directorate General Taxation and Customs Union, European Commission.
    16. Caroline Dewilde, 2011. "GINI DP 18: The interplay between economic inequality trends and housing regime changes in advanced welfare democracies," GINI Discussion Papers 18, AIAS, Amsterdam Institute for Advanced Labour Studies.
    17. Dan Andrews, 2010. "Real House Prices in OECD Countries: The Role of Demand Shocks and Structural and Policy Factors," OECD Economics Department Working Papers 831, OECD Publishing.
    18. Kyung-Hwan Kim & Chang-Moo Lee & Young-Man Lee, 2014. "Rental housing system and housing market volatility: monthly rent-based vs. asset-based systems," Chapters,in: The Global Financial Crisis and Housing, chapter 12, pages 296-312 Edward Elgar Publishing.
    19. Boehm, Thomas P. & Schlottmann, Alan M., 2014. "The dynamics of housing tenure choice: Lessons from Germany and the United States," Journal of Housing Economics, Elsevier, vol. 25(C), pages 1-19.

    More about this item

    Keywords

    financial regulation; fiscalité; homeownership; housing market; marché du crédit hypothécaire; marché du logement; mortgage markets; propriété immobilière; réglementation financière; taxation;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • 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

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