Jan de Haan

Risks in homeownership : a perspective on The Netherlands

Purpose n n n n nThe purpose of this paper is to explore the risk factors in homeowners from the individual household’s perspectives within the owner-occupied housing sector of The Netherlands. Risk in home ownership from mortgage providers’ perspectives has received tremendous attention than individual home owner’s perspectives in existing literature following the financial crisis in 2007/2008 within the euro zone. n n n n nDesign/methodology/approach n n n n nThe paper adopted a broader review of extent literature on the different concepts and views on risk in homeownership. These concepts are unified into a framework that enhances our understanding of the perceived sophisticated risk in owner-occupier with focus on The Netherlands. n n n n nFindings n n n n nFrom the perspective of the homeowner, two main types of risks were identified: default payment and property price risk. The paper has unearthed a quantum number of factors which underline the above risks. These factors relate to the initial amount of mortgage loan taken out, the future housing expenses and the income development of the owner-occupier. Family disintegration is identified, as one of the main causes of mortgage default and that of property price risk are mainly influenced by income levels, interest rates and conditions in the social and private rental sectors. n n n n nResearch limitations/implications n n n n nFindings of the paper are based on review of the extant literature in the context of the Dutch housing market. Possible rigorous situational analysis using other tools are recommended for further research. n n n n nOriginality/value n n n n nThis paper contributes to the much needed body of knowledge in the owner-occupied sector and provides a better understanding of risk in home ownership from the individual perspectives.

Risks and interrelationships of subdistrict house prices: the case of Amsterdam

This paper uses individual house transaction data from 1995 to 2014 in Amsterdam to explore the risks and interrelationships of the subdistrict house prices. Simple indicators suggest that house prices grow faster and are more risky in the central business district and its immediate surrounding areas than in the peripherals. Furthermore, we observe an over time decreasing intervariations between the subdistrict house price growth rates, whereas we find a lead–lag and house price causal flow from the more central to the peripheral subdistricts.

Amsterdam house price ripple effects in The Netherlands

Purpose n n n n nThis paper aims to examine the existence of the ripple effect from Amsterdam to the housing markets of other regions in The Netherlands. It identifies which regional housing markets are influenced by house price movements in Amsterdam. n n n n nDesign/methodology/approach n n n n nThe paper considers the ripple effect as a lead-lag effect and a long-run convergence between the Amsterdam and regional house prices. Using the real house prices for second-hand owner-occupied dwellings from 1995q1 to 2016q2, the paper adopts the Toda–Yamamoto Granger Causality approach to study the lead-lag effects. It uses the autoregressive distributed lags (ARDL)-Bounds cointegration techniques to examine the long-run convergence between the regional and the Amsterdam house prices. The paper controls for house price fundamentals to eliminate possible confounding effects of common shocks. n n n n nFindings n n n n nThe cumulative evidence suggests that Amsterdam house prices have influence on (or ripple to) all the Dutch regions, except one. In particular, the Granger Causality test concludes that a lead-lag effect of house prices exists from Amsterdam to all the regions, apart from Zeeland. The cointegration test shows evidence of a long-convergence between Amsterdam house prices and six regions: Friesland, Groningen, Limburg, Overijssel, Utrecht and Zuid-Holland. n n n n nResearch limitations/implications n n n n nThe paper adopts an econometric approach to examine the Amsterdam ripple effect. More sophisticated economic models that consider the asymmetric properties of house prices and the patterns of interregional socio-economic activities into the modelling approach are recommended for further investigation. n n n n nOriginality/value n n n n nThis paper focuses on The Netherlands for which the ripple effect has not yet been researched to the authors’ knowledge. Given the substantial wealth effects associated with house price changes that may shape economic activity through consumption, evidence for ripples may be helpful to policy makers for uncovering trends that have implications for the entire economy. Moreover, the analysis controls for common house price fundamentals which most previous papers ignored.