The Transition in Housing and Nations of Homeowners

South East Europe is home to 57.8 million people living in more than 20 million dwellings. It includes eight countries with very different size, population, resources and stages of economic and social development. Perhaps the common feature in housing terms is the high degree of private ownership effectively establishing ‘nations of homeowners’. Despite its overall diversity, the region is often perceived to be homogenous due to the ideology of socialist ruling regimes regardless of the historical and cultural differences between countries. The former socialist countries were for several decades governed by distinctly different ideological principles with extensive state control over property rights and the provision and allocation of housing. Political changes in the early 1990s (re)introduced markets, parliamentary democracy and important institutional reforms, thus changing dramatically the housing policy scene. Although countries in the region have a common legacy, there were significant differences in the way the socialist model was implemented as well as in the housing conditions of these nations. Housing systems are ‘path dependent’, which influences the newly established housing markets during the transition in different national contexts. These initial differences in return are multiplied by the choice of housing policy instruments and the type of intervention selected by governments during the transition.

It is necessary to recognise that although the extent and the intensity of housing reforms have been different across South East Europe, the transformation of the housing sector according to market principles has been significant and rapid. The systems of housing provision in these countries, however, are still in a state of flux. The traditional mechanisms of central planning have broken down much faster than the appropriate market mechanisms and regulatory instruments have emerged. Moreover, the transition from planning to markets has taken place under extremely unfavourable economic conditions and with severe dislocations in the housing sector marked by high inflation, rapidly escalating prices and collapsing output. Political instability and civil war have created huge challenges leading to massive displacement of people across the region and serious damage to existing housing.