Home Ownership and the Welfare State: Is Southern Europe Different?

High dwelling vacancy rate and high prices of housing in Malta a mediterranean phenomenon

“…So the only relatively sure area for investment remains property. This preference for investment in property among the South European countries has been noticed by Castles and Ferrera, who attributed it to the ''underdeveloped stock market and the inefficiency of the banking sector'' (Castles and Ferrera 1996). Only in the late eighties and the early nineties, with the introduction of a more liberal trading regime, the gradual relaxation of exchange controls, and the establishment of the Malta Stock Exchange did any alternative outlets for investment appear.…”

“…Therefore, there are no incentives for the private sector to invest in rental housing. Castles and Ferrera (1996) suggest that the rigid rent regulation systems in Italy, Greece, and Spain have resulted in similar 'market distortions' and the development of a two-tier rental sector. One section of the rental market is then let under the old system-it is very affordable but not accessible to new entrants.…”

“…It implies that a disproportionately large part of the welfare tasks are carried out within the family, without much interference from the market or the state (Barlow and Duncan 1994;Castles and Ferrera 1996;Allen et al 2004;Flaquer 2000). Welfare policies [including housing policies] are formulated to complement the essential role of family provision.…”

“…One section of the rental market is then let under the old system-it is very affordable but not accessible to new entrants. The other sector consists of vacant dwellings that are kept out of the market due to fear that the tenants may never leave the property or the government may reintroduce the requisition law and confiscate the property (Castles and Ferrera 1996;Carreras-i-Solanas et al 2004).…”

Housing Expenditures and Income Poverty in EU Countries

“…Much of the substantive interest in this issue has arisen in connection with the housing tenure with the largest hidden income component -home ownership -and the effect of cross-country differences in home ownership rates on comparisons of poverty based on real as opposed to nominal incomes. The possible income effects of owner-occupied housing have been highlighted especially by Castles (Castles, 1998a(Castles, , 1998bCastles and Ferrera, 1996), who contrasts the New World, where home ownership is high but income inequalities, as conventionally measured, are wide, and the old (that is, western Europe) where home ownership is generally lower and income inequalities are narrower. He contends that home ownership in the New World has an equalising impact on real incomes, mainly because of its life-course distribution effects: house purchase during the economically active years leads to large expenditure savings on housing in old age and thereby boosts the real command over resources of the otherwise poverty-prone elderly.…”