Impacts of housing prices on the financial position of households

Jan Bruha, Michal Hlaváček and Lubos Komarek ()

Chapter Thematic Article 4 in CNB Financial Stability Report 2012/2013, 2013, pp 120-127 from Czech National Bank, Research and Statistics Department

Abstract: This article examines the extent to which housing prices affect the balance sheets and borrowing and consumption decisions of households in the Czech Republic and indirectly also their ability to repay their debts. Empirical results were obtained by applying the Propensity Score Matching (PSM) method, which allows us to compare statistical units (households) having a different key characteristic (owner-occupied versus rented housing) and similar observed other characteristics. The article concludes that in the period of fast growth in housing prices there were differences between households not only in consumption and net savings, but also in saving structure. However, the analysis does not confirm the assumption made by many theoretical models that there is a credit channel from housing prices to GDP. On the contrary, it was found that property-owning households have statistically significantly higher net savings on average than households living in rented dwellings, even at a time of surging housing prices.

Date: 2013
ISBN: 978-80-87225-44-8
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:cnb:ocpubc:fsr1213/4

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