Home ownership, rather than rented accommodation, has become the norm in most OECD countries over the last 20 years. In fact, Germany is the only OECD country where the owner occupation rate is well below 50% of the total.
Indeed, its rate has remained broadly unchanged (around 41%) since 1980. Elsewhere, owner occupancy rates have increased quite markedly in countries such as France, Italy and the Netherlands, with strong upsurges in recent years reflecting booms in property markets. Particularly sharp rises were recorded in Spain, which had the highest owner occupation rate at 83% in 2004, just above Italy at 80%. Portugal’s owner occupation rate leapt from 64% in 2002 to 75% in 2004. If there is a pattern, the highest owner occupancy rates are in Anglo-Saxon and Mediterranean countries, though Norway’s rate at 77% in 2002 was also among the highest.
Meanwhile, property prices have been rising in real terms in most countries since the mid-1990s, reflecting the growing importance of housing wealth in the current economic upswing. However, in some countries prices may be overvalued, though the extent of that depends largely on longer-term interest rates and other fundamentals. Nonetheless, policymakers and newer home owners are concerned as any downward correction could well be sharp and protracted, with impacts on spending and investment.
See “Recent House Price Developments: The Role of Fundamentals”, Economics Department Working Paper No. 475, available at www.oecd.org/eco.
©OECD Observer No. 255, May 2006
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