Housing

Abstract

The housing bubble in three European countries with a strong culture of owner-occupation – Spain, Ireland, and the United Kingdom – was a precursor to the recession they experienced from 2008 after 2007. All three countries have very small private-rental sectors and high home ownership rates, defined as the proportion of the total number of residential units in the country that are owner-occupied. The home ownership rate was 78% in Spain (2002), 83% in Ireland (2002), and 69% in the UK (2002); in contrast, it was only 42% in Germany (2002), 49% in the Netherlands (2000), and 55% in France (2000). 1 According to the European Central Bank (ECB) (2006: 65), the share of rent expenditure in the Harmonised Index of Consumer Prices (HICP) for euro area countries was less than 3% for Ireland and Spain, compared to a euro area average of over 6% and a high of 11% for Germany.