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. 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.

Bibliographic Details

Main Authors:	Beck, Thorsten, Tiongson, Erwin, Kibuuka, Katie
Format:	Policy Research Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2010-02
Subjects:	ACCESS TO CREDIT, ACCESS TO FINANCIAL SERVICES, ACCESS TO MORTGAGE, ADVANCED ECONOMIES, AFFORDABILITY, ARREARS, BANK LENDING, BANKING CRISES, BANKING INDUSTRIES, BANKING SECTOR, BANKING SECTOR STABILITY, BANKRUPTCY, BANKRUPTCY LAW, BANKS, BORROWING, BORROWING CAPACITY, BUSINESS CYCLE, CENTRAL BANK, CENTRAL BANKS, COLLATERAL, CONSUMER CREDIT, CONSUMER DURABLES, CONSUMPTION SMOOTHING, COOPERATIVES, CREDIT BUREAUS, CREDIT CONSTRAINT, CREDIT CONSTRAINTS, CREDIT CRUNCH, CREDIT EXPANSION, CREDIT GROWTH, CREDIT INFORMATION, CREDIT INFORMATION SYSTEMS, CREDIT LEVELS, CREDIT MARKET, CREDIT OBLIGATIONS, DEBT BURDEN, DEBT BURDENS, DEBT HOLDING, DEBT HOLDINGS, DEBT LEVELS, DEBT PAYMENT, DEBT SERVICE, DEBT SERVICE OBLIGATION, DEBT SERVICE PAYMENTS, DEDUCTIBLE, DEFAULTS, DEMOGRAPHIC, DEMOGRAPHIC CHARACTERISTICS, DEPENDENT, DEPENDENTS, DEPOSIT, DISPOSABLE INCOME, DOMESTIC BANKS, DUMMY VARIABLE, DUMMY VARIABLES, ECONOMIC COOPERATION, ECONOMIC GROWTH, EMPLOYMENT STATUS, ENTERPRISE CREDIT, EXCHANGE RATE, EXPENDITURE, EXPENDITURES, EXPOSURE, FAMILIES, FEDERAL RESERVE, FEMALE RESPONDENTS, FINANCE ACCESS, FINANCIAL ASSETS, FINANCIAL BURDEN, FINANCIAL BURDENS, FINANCIAL CONSTRAINTS, FINANCIAL CRISIS, FINANCIAL DEREGULATION, FINANCIAL DEVELOPMENT, FINANCIAL DISTRESS, FINANCIAL FRAGILITY, FINANCIAL POSITION, FINANCIAL RESOURCES, FINANCIAL RISKS, FINANCIAL SECTOR, FINANCIAL STABILITY, FINANCIAL STUDIES, FINANCIAL SUPPORT, FINANCIAL SYSTEMS, FINANCING CONSTRAINTS, FOOD PRICES, FOREIGN BANKS, FOREIGN CURRENCY, FOREIGN EXCHANGE, FUNDING SOURCES, GENDER, GENDER DIFFERENCES, GREATER ACCESS, HEALTH STATUS, HOLDINGS, HOME OWNERSHIP, HOMEOWNERS, HOUSE OWNERS, HOUSEHOLD ACCESS, HOUSEHOLD ARREARS, HOUSEHOLD DEBT, HOUSEHOLD INCOME, HOUSEHOLD LENDING, HOUSEHOLD WELFARE, HOUSEHOLDS, HOUSES, HOUSING, HOUSING ECONOMICS, HOUSING FINANCE, HOUSING FINANCE SYSTEMS, HOUSING POLICY, INCOME GROUPS, INCOME GROWTH, INCOME INEQUALITY, INCOME SHOCKS, INCOME STREAM, INCOMES, INDEBTEDNESS, INEQUALITY, INSTALLMENT, INSTALLMENTS, INTEREST PAYMENT, INTEREST PAYMENTS, INTEREST RATE, INTEREST RATE DATA, INTEREST RATE SHOCKS, INTEREST RATES, INTERNATIONAL BANK, INTERNATIONAL SETTLEMENTS, JUDICIAL ENFORCEMENT, LABOR MARKET, LACK OF FINANCE, LEGAL RIGHTS, LENDERS, LIABILITY, LIBERALIZATION, LIQUIDITY, LIQUIDITY CONSTRAINTS, LIVING STANDARDS, LOAN, LOAN DELINQUENCY, LOAN PAYMENTS, LOAN PRODUCT, LOCAL CURRENCIES, LOCAL CURRENCY, MACROECONOMIC CRISIS, MACROECONOMIC DATA, MACROECONOMIC RISKS, MACROECONOMIC STABILITY, MICRO DATA, MICRO-DATA, MONETARY FUND, MONETARY POLICY, MORTGAGE, MORTGAGE CREDIT, MORTGAGE DEBT, MORTGAGE FINANCE, MORTGAGE HOLDER, MORTGAGE HOLDERS, MORTGAGE INSTRUMENTS, MORTGAGE INTEREST, MORTGAGE LENDING, MORTGAGE LOAN, MORTGAGE LOANS, MORTGAGE MARKET, MORTGAGE MARKETS, MORTGAGE PAYMENT, MORTGAGE PAYMENTS, MORTGAGES, PRINCIPAL REPAYMENT, PRIVATE SECTOR DEVELOPMENT, PRIVATIZATION, PROPERTY RIGHTS, RENT PAYMENTS, RENTS, REPAYMENT, RISK OF DEFAULT, SAVINGS, SOCIAL EXCLUSION, TAX, TAX RATES, TRANSITION ECONOMIES, UNDERLYING ASSET, UNION, URBAN AREAS, VARIABLE INTEREST RATE, VARIABLE INTEREST RATES, VARIABLE RATE, VARIABLE RATE MORTGAGES, VULNERABLE HOUSEHOLDS,
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
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