Mortgage Finance in Central and Eastern Europe : Opportunity or Burden?
Household credit, especially for mortgages, has doubled over the past years in the new European Union member countries, raising concerns about the economic and social consequences of household indebtedness in the event of a macroeconomic crisis. Us...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2010/02/11747685/mortgage-finance-central-eastern-europe-opportunity-or-burden http://hdl.handle.net/10986/19925 |
| Summary: | Household credit, especially for
mortgages, has doubled over the past years in the new
European Union member countries, raising concerns about the
economic and social consequences of household indebtedness
in the event of a macroeconomic crisis. Using household
survey data for 2005, 2006, and 2007 for both old and new
European Union members, this paper assesses the determinants
of access to mortgage finance. It also examines whether
mortgage holders were more likely to suffer financial
distress compared with non-mortgage holders in the period
before the global financial crisis. The analysis does not
find any systematic evidence that mortgage holders are
financially more vulnerable than renters or outright owners;
in fact, the incidence of financial vulnerability generally
fell between 2005 and 2007, possibly reflecting the strong
income growth experienced by these countries over this
period. In addition, although tenure status is more
difficult to explain in the new European Union member
countries, the analysis finds that many of the same drivers
of tenure status in the older member countries generally
drive tenure status in the newer member countries as well.
Finally, there is no evidence that access to mortgage credit
is based on expected income in the old or in the new
European Union member countries. |
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