Housing Finance in The Euro Area: Structural Issues Report

European Central Bank

Download Document

Date Published 2009
Primary Author European Central Bank
Other Authors
Country Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta , Netherlands, Portugal, Slovenia, Spain, United Kingdom


Housing finance is of crucial importance to the Eurosystem as housing loans constitute the largest liability of households and account for a large proportion of bank lending. The financial crisis that emerged after the intensification and broadening of the financial turmoil that started in US housing finance in 2007, has strengthened interest in housing finance aspects. This report analyses the main developments in housing finance in the euro area in the decade, covering the period from 1999 to 2007. It looks at mortgage indebtedness, various characteristics of loans for house purchase, the funding of such loans and the spreads between the interest rates on loans granted by banks and the interest rates banks had to pay on their funding, or the return they made on alternative investments. In addition, the report contains a comparison of key aspects of housing finance in the euro area with those in the United Kingdom and the United States. At the end, the report briefly discusses aspects of the transmission of monetary policy to the economy. Studies of housing finance in the euro area are to some extent hindered by the lack of detailed information on the characteristics of mortgage loans and on the funding of these loans. Long time series that allow an analysis of developments over time are often lacking or incomplete. The need for comprehensive datasets and for information from household surveys, harmonised and readily available, must be emphasised. This report is aimed at filling some of these gaps, although long time series, in particular, remain essential.

< Back to Search Results