Rental Housing Market and Home Ownership (Vol. 26)

Dr. Michael Voigtländer und Thomas Hofer

- Two Analyses -

Is the home ownership ratio suitable as an indicator of the state of the housing market? Put in other words: Is a low ownership ratio a sign of an underdeveloped housing market? At roughly 43 %, Germany’s comparatively low home ownership ratio is often criticized, giving rise to a call for subsidies.

In debate at European level, too, it is claimed that home ownership promotes economic growth by stimulating private consumption to the benefit of the economy as a whole. To exploit these mechanisms, it is essential in the view of the European Commission to have especially efficient housing finance instruments in place. It is against this background that the Commission’s Green Paper on Mortgage Credit in the EU must be considered. In the consultative paper, the questions put up for debate are how obstacles to an integrated single market might be eliminated and what measures at European level could enhance the efficiency and competitiveness of the mortgage credit markets.

The inter-relationships between housing market, housing finance and the development of the economy as a whole have been studied in depth where the Anglo-Saxon countries are concerned. Yet hardly any comparable studies have been conducted for countries of Continental Europe, in particular for Germany.


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