Young Households’ Diminishing Access to Homeownership Attainment in Europe

Abstract

This multi-country article focuses particularly on homeownership among the young. After all, relying on European Union Statistics on Income and Living Conditions (EU-SILC) data in twelve European countries, we can see that in contrast to the aggregate homeownership rate of ‘all’ households (i.e., no matter what age the households’ heads are) that has remained relatively stable, the aggregate homeownership rate of young households (with heads aged 0–35 years) has fallen substantially in Europe in recent decades. Multiple analyses and quantitative comparisons confirm the stylized fact that acquiring a home has indeed become a challenge for young adult households (also no matter the income quartile in which they fall); rather than that, however, their lowering homeownership rates are simply due to changing sociodemographic characteristics (such as having children later in life and staying longer in education). Moreover, it is unveiled that young tenants and lower income young households are especially disadvantaged with regard to access to the housing market. Through our actual research, we aim to answer the question: Has the government’s fiscal policy strengthened or weakened the declining trend in young people’s homeownership? After all, some evidence exists of an MID having a perverse effect, i.e., capitalizing on higher housing prices. However, multilevel mixed-effects logistic regressions reveal that the use of a mortgage interest deduction (MID) has had a significant positive effect on young adults’ homeownership probability—with the strongest effect for the highest incomes. We believe that all the above results are—in the first place—relevant for governments that are willing to stimulate homeownership. They indicate that some (additional) policy interventions are indeed needed, next to or instead of granting an MID, and that the focus of housing policy should also (and more) be on tenants and those with lower incomes.

Perceptions of Young Adults on the Critical Success Factors of the Build-to-Rent Housing Model in Sydney, Australia

“…Given growing housing affordability concerns across the globe, rental housing can contribute to sustainable and inclusive cities to support the evolving needs of younger generations [34,35]. The alarming trend of housing affordability and the increasing challenge for young adults to afford homeownership has ignited scholarly discussions in numerous countries worldwide, e.g., Castro Campos et al [36] in Hong Kong, Lux et al [37] in Czech Republic, Ronald et al [38] in Netherlands, and Vangeel et al [39] in Europe.…”