Home ownership and risk across countries: measures and perceptions

Homeownership, especially any housing equity, can undeniably enhance to the security of individual households. In that respect the increase in both homeownership and house prices - as could be witnessed across Europe the last decade(s) - offered unprecedented opportunities. But, as usual, there is a price to be paid: high housing expenditures and, more generally, increased risk. Housing risk can be considered as complex and multiple, involving many exogenous and endogenous factors, which are unevenly distributed and constantly subject to change. So, households¿ decision making on homeownership and mortgage take-up is evenly diffuse. In this paper housing risks and households¿ decision-making will be discussed, both from a theoretical viewpoint as well as showing some empirical results. In theoretical terms, two distinct approaches are in place: the realist approach, featuring the rational customer versus the structuralist approach, featuring the situated actor. But both - the rational customer and the situated actor alike - are heavily influenced by the institutional context and the trust people have in the sustainability of those institutional arrangements. Consequently, the core of our discussion is on the possible role of the institutional context as a bridging factor between both approaches. In the empirical part of the paper we will present some preliminary results of a cross-country analysis. Here we will link on one hand the objective versus subjective decision-making process of homeowners with the prevailing institutional context in a land.