After the crisis: what kind of home ownership policies?

European Network for Housing Research Conference, Prague 28/06 - 01/07/2009: "Changing Housing Markets: Integration and Segmentation"

Global financial crisis, uneven repercussions for homeowners

The financial crisis has provoked a property crisis all over the world. Everywhere the number of house sales and of new constructions has dropped dramatically. However, the repercussions for borrowers have varied widely from country to country. In some countries the rate of defaulting borrowers in 2008 has skyrocketed in comparison to 2007. That is the case with the United States, Great Britain and Spain, whereas, for the time being, Germany, the Netherlands, Italy, France and even Canada, appear to be avoiding a rise in the number of defaults and repossessions. In these countries the current mortgagors are not, yet, in trouble. The difficulties will probably come later, but this will be caused by the economic crisis and concurrent rise in unemployment.

How can these differences be explained? What are the risk factors for homeowners? Once the crisis is over, governments will have to decide about their housing policy. Homeownership will very probably remain in favour in most countries, for the same reasons as previously, (it is the preference of households, it results in a lower burden on public spending, increased involvement in the community and permits the accumulation of assets in anticipation of retirement). What can be learned in relation to the soundness of public policies fostering home ownership and regarding the ways and means used by the public authorities for the implementation of these policies? The present economic crisis provides a timely opportunity to address these questions. These reflections cannot be oriented towards immediate application, since in the short term ensuring employment will be the primary concern.

Download the study (pdf - 370 ko)