Open this publication in new window or tab >>2017 (English)In: Journal of European Real Estate Research, ISSN 1753-9269, E-ISSN 1753-9277, Vol. 10, no 2Article in journal (Refereed) Published
Abstract [en]
Purpose – This paper aims to examine tenure choice in the Swedish housing market with explicitconsideration of households’ credit constraints in combination with age and ethnic background.
Design/methodology/approach – Observations of some 940,000 households were used to analyse theStockholm housing market in 2008, prior to the implementation of the mortgage cap. The tenure choicemodels were estimated using a two-stage instrument variable (IV) logit and probit model with ownership orrenting as outcome.
Findings – The results suggest, as expected, that being financially restricted is negatively related toowning. In particular, financial restriction is more binding for young households and households with aforeign background than for other types of households. These two sub-groups are also known to havedifficulties establishing themselves in the rental housing market, and are therefore specifically vulnerable tofurther financial constraints such as borrowing restrictions or amortization requirements.
Originality/value – The government in Sweden has become concerned with the rapid growth inhousehold indebtedness. As a response, a 0.85 loan-to-value ratio mortgage cap was introduced in 2010.However, critics are concerned with the effects this may have on the possibility for certain households topurchase a dwelling.
Place, publisher, year, edition, pages
Emerald Publishing, 2017
Keywords
Young adults, Homeownership, Budget restriction
National Category
Other Civil Engineering
Identifiers
urn:nbn:se:kth:diva-340923 (URN)10.1108/JERER-09-2015-0035 (DOI)000407443100002 ()2-s2.0-85027315244 (Scopus ID)
Note
QC 20231218
2023-12-162023-12-162023-12-18Bibliographically approved