Housing Prices at Their Peak: A Comparative Study on the Influence of Housing Financialization in Socially Protected Countries

Abstract

This master thesis examines the residential housing market in three socially protected countries: Denmark, Finland and the Netherlands. The aim is to outline what economic factors drive housing prices in relation to financialization of housing markets, and to see how different governments intervene in times of the historically highest housing prices. The thesis applies Schwartz and Seabrooke’s (2008) typology of Varieties of Residential Capitalism as a main theoretical framework. The typology is triangulated with other theories in the area of welfare regimes' influence on housing dynamics, drivers of wealth inequality and understandings of housing rental markets. A multiple linear regression model is conducted within the timeframe of 2005-2021, and used along with qualitative reports and legislative documents to gain an understanding of drivers behind prices and motivations from governments to intervene on the matter. It was found that lower unemployment, disposable income, interest rates, loan-to-income ratio, loan-to-value ratio and easier access to mortgages affect increasing housing prices. The thesis concludes that explaining government motivation and increasing housing prices is a complex matter which requires a holistic perspective, since some parts of the analysis concludes against pre-made expectations. Housing decommodification, housing as a patrimony along with macroprudential policies and degree of financialization plays a significant part in explaining homeowner occupancy rates, housing prices and government motivations.