G.L.Piggy [at] gmail.com
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Tyler Cowen’s asks in a headline: “Is a high home ownership rate a sign of a successful country?”
He posts statistics from a magazine which he’s unable to link to which shows that the European countries with the highest home owner occupancy rates seem to be the poorest. Romania, Lithuania, Croatia, and Slovakia have ownership rates greater than 90% while Germany, Switzerland, and Austria have the lowest rates – all under 60%.
For comparison, we have data on owner-occupancy rates for the various U.S. states. The U.S.’s overall ratio is about 67%. The states with the highest property values – New York, California, Hawaii, and Nevada have the lowest owner-occupany rates. Washington D.C. has the lowest overall ratio which might be mixed in with a completely different property issue.
Some have suggested in MR’s comments that Eastern European countries have high ownership rates because in the aftermath of Communism the governments sold homes very cheaply. That could be true, but it doesn’t explain why the wealthiest European countries have the lowest home ownership rates. Just thinking visually, dynamic countries with big cities full of apartments and temporary, on-the-go white collar workers would tend to be the richest countries. Landlords would invest in these areas which draw labor because of the commercial opportunities. As with all things economic, it’s not as if there is a “right” owner-occupancy ratio. The Eastern European countries probably have a very low number of domiciles while the wealthier European countries have landlord-investors and a low ratio of rooms to inhabitants. What the cited statistics don’t tell us is what percentage of people in these countries are home owners. The more important question insofar as “owning a stake” provides positive externalities for a nation is how many people a.) own something and b.) own something of value.
Some of the worldly commenters can weigh in.