Housing Market Challenges in Europe and the United States: Any Solutions Available?

284 Pages·2009·1.12 MB·English

by  Philip Arestis

HousingMarketChallengesinEuropeandtheUnitedStates
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Housing Market Challenges
in Europe and the
United States
Any Solutions Available?
Editedby
Philip Arestis
Peter Mooslechner
and
Karin Wagner
Editorialandselectionmatter©PhilipArestis,PeterMooslechner
andKarinWagner2009
Individualchapters©Contributors2009
Allrightsreserved.Noreproduction,copyortransmissionofthis
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Theauthorshaveassertedtheirrightstobeidentifiedastheauthorsofthis
workinaccordancewiththeCopyright,DesignsandPatentsAct1988.
Firstpublished2009by
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Contents
ListofFigures vii
ListofTables ix
NotesontheContributors xi
1 Introduction:HousingMarketChallengesinEuropeand
theUnitedStates 1
PhilipArestis,PeterMooslechnerandKarinWagner
2 HousingMarketsinEuropeandintheUSA:WhatAre
theRelevantIssuesToday? 15
PeterMooslechnerandKarinWagner
3 SubprimeMortgageMarketandCurrentFinancialCrisis 40
PhilipArestisandEliasKarakitsos
4 DeterminantsofHomeownershipRates:HousingFinance
andtheRoleoftheState 60
ElisabethSpringlerandKarinWagner
5 TheRentalHousingMarket 85
DieterGstach
6 HousingMarkets,BusinessCyclesandEconomicPolicies 109
ChristopheAndréandNathalieGirouard
7 EuropeanRentalMarkets:RegulationorLiberalization?
TheSpanishCase 131
MontserratPareja-EastawayandMaríaTeresaSánchez-Martínez
8 FiscalAspectsofHousinginEurope 158
GuidoWolswijk
9 TowardsaNewHousingSysteminTransitionalCountries:
TheCaseofHungary 178
JózsefHegedüs
10 HousePriceandOtherHousingMarketData:AUser’s
Perspective 203
AnthonyMurphy
v
vi Contents
11 ResidentialPropertyPriceStatisticsfortheEuroArea
andtheEuropeanUnion 221
MartinEiglsperger
12 HousingandFinancialWealthinAustria:
WhatCanSurveyDataTellUsfortheAnalysisof
FinancialStabilityIssues? 239
PirminFessler,PeterMooslechner,MartinSchürzand
KarinWagner
Index 264
List of Figures
2.1 Realhousinginvestment 21
2.2 Mortgagedebtoutstandinganddisposableincome 27
2.3 Shareofvariableratelendinginnewloansforhouse
purchaseandmortgagedebttoGDPin2007 29
4.1 Annualchangesinhomeownershipratesinpercentage
points,1997–2006 63
4.2 Selectedeconomies:SupplysideallowancestoGDPratio
inpercentin2001 69
4.3 Developmentofsubsidizedhousingsupplyandhousing
permissionsandcompletionsinAustria,1996–2003 70
5.1a Yearlygrowthratesofrealrentsinpercent 93
5.1b Yearlygrowthratesofrealrentsinpercent 93
5.2a Yearlygrowthratesofrealrentsinpercent 94
5.2b Yearlygrowthratesofrealrentsinpercent 94
5.3a Distributionofdisposablehouseholdincome 99
5.3b Distributionofdisposablehouseholdincome 99
5.4 Rentedmarketsharesbyhouseholdsize 101
5.5 Rentedmarketsharesbyagegroup 102
5.6a Distributionofrent-to-incomeratioinpercent 103
5.6b Distributionofrent-to-incomeratioinpercent 103
6.1 OECDrealhousepricesandthebusinesscycle 111
6.2 Marginalpropensitiestoconsumeoutofhousing
wealthandmortgagemarketindicators 116
7.1 RentedhousinginseveralEuropeancountries 134
7.2 ContractsandrentsinBarcelona,1984–2007 144
7.3 Regulatedandunregulatedhousing,1962–2007 146
7.4 ‘Disqualified’regulatedhousing 147
8.1 Housingtaxes,2006 164
9.1 Macroeconomictrends:GDP,CPI,andintereston
housing(%) 181
9.2 Newconstructionandbuildingpermitsbetween1989
and2008 183
9.3 Housepricechanges 183
9.4 Housingloans,1989–2008 187
9.5 Housingsubsidies,1998–2007,aspercentoftheGDP 188
9.6 Householdborrowing,1996–2008 190
vii
viii ListofFigures
10.1 Channelsoftransmissionofthemortgageand
housingcrisis 203
10.2 VariousmeasuresofUKhouseprices 209
10.3 VariousmeasuresofGreaterLondonhouseprices 209
10.4 Estimatedlong-runeffectsofchangesinthecredit
conditionsindex 215
10.5 SimulatedrealUShouseprices 216
11.1 Residentialpropertypricesforeuroareacountries,
annualpercentagechanges 224
11.2 Residentialpropertypricesfornon-euroarea
EUcountries,annualpercentagechanges 225
11.3 Residentialpropertypricesfortheeuroareaatannual
andsemi-annualfrequency,annualpercentagechanges 234
12.1 Stockand/ormutualfundshareholdingsbygross
financialwealthdecile 252
12.2 Whichsourcesdoyourelyonwhenyouseek
informationonfinancialissues? 257
List of tables
2.1 Housingmarketindicators 17
2.2 Timingofmaximumcorrelation 22
4.1 Introductionandusageofsecuritization
forhousingfinanceinEuropeaneconomiesand
theUSA 67
4.2 Fixedeffectsmodelforownershiprate 74
4.3 Fixedeffectsmodelforownershiprate
(incl.interestrates) 76
A4.1 Costoffinancing–timeseries 79
A4.2 Fixedeffectsmodelwithinstrumentalvariables 80
6.1 Housepricesinrealtermsandrelativetorents
andincome 112
6.2 Short-termandlong-termimpactoffinancialand
housingwealthonconsumption 115
6.3 Long-termimpactofhousingequitywithdrawal
onconsumption 116
7.1 Housingtenure 135
7.2 TenureinSpain 144
7.3 Costofrenteddwellingsaccordingtotheyearof
signature 150
8.1 Maintaxcategoriesaffectinghousing/mortgagesin
theeuroarea,2007 161
8.2 Overallhousingsubsidymeasures,1999 165
A8.1 Taxonimputedrents 171
A8.2 Mortgageinterestpaymentstaxdeductibility 172
A8.3 Taxonhousingcapitalgains 173
A8.4 Indirecttaxes 174
9.1 BasicindicatorsofhousingconditionsinHungary,
1970–2000 182
9.2 Housingallowance,2000–2007 196
10.1 Simplemixadjustedhousepriceexamples 205
10.2 StartdatesofsomeEuropeanhousepricedata 206
10.3 Variousmeasuresofquarterly(cid:1)lnhousepricesfor
theUK 210
ix