8. Market Stability, Housing Finance and Homeownership in Germany

  1. Colin Jones2,
  2. Michael White3 and
  3. Neil Dunse2
  1. Peter Westerheide

Published Online: 24 FEB 2012

DOI: 10.1002/9781118280829.ch8

Challenges of the Housing Economy: An International Perspective

Challenges of the Housing Economy: An International Perspective

How to Cite

Westerheide, P. (2012) Market Stability, Housing Finance and Homeownership in Germany, in Challenges of the Housing Economy: An International Perspective (eds C. Jones, M. White and N. Dunse), Wiley-Blackwell, Oxford, UK. doi: 10.1002/9781118280829.ch8

Editor Information

  1. 2

    Institute for Housing, Urban and Real Estate Research, Heriot-Watt University, UK

  2. 3

    School of Architecture, Design and the Built Environment, Nottingham Trent University, UK

Author Information

  1. Witten/Herdecke University, Germany

Publication History

  1. Published Online: 24 FEB 2012
  2. Published Print: 4 APR 2012

Book Series:

  1. Real Estate Issues

ISBN Information

Print ISBN: 9780470672334

Online ISBN: 9781118280829

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Keywords:

  • Market Stability;
  • Homeownership;
  • Renting;
  • Mortgage Lending;
  • Indebtedness;
  • Saving;
  • Germany

Summary

The recent experience with housing bubbles in many housing markets has directed public attention to the impact of housing finance systems on the stability of housing markets. Smoothly functioning mortgage markets with low equity requirements and high loan-to-value ratios have long been advocated to promote homeownership, but they are now increasingly blamed for their strong incentives towards unsustainable indebtedness of private households and for the great sensitivity of the housing market to monetary shocks. However, substantial down payment requirements are one particular element of national housing systems that might contribute to stability but only within a given institutional framework. This chapter focuses on these issues by reference to the German housing market with its particular institutional characteristics, i.e. an exceptionally low ratio of homeownership among households and a very broad rental market, offering long-term renting opportunities.