Ældre boligejeres finansielle risici under et tilbageslag på boligmarkedet

Mik Højby Hansen

Student thesis: Master thesis


The overall purpose of the master’s thesis is to analyse the volume of the financial risks of having investet capital in an owner-occupied dwelling when the capital at the same time must be used to finance future current spending. The master’s thesis decribes de elders’ situation in the housing market when it comes to type of residence, income-, debt and financial circumstances as well as the considerations elder people make when moving, and the reasons why they move. It was found that most elder people have somewhat alike income and financial circumstances, where the income is not that large, and the majority of their income is placed in an owner-occupied dwelling. Debt among the elderly is on the other hand very different, where 60 per cent of the elderly over 70 years has no debt or at least a limited amout of debt. On the contrary, 30 per cent of the elderly over 70 years has a debt exceeding 182 per cent of their annual income. Elder people’s moving patterns are characterised by the fact that only 50 per cent of those considering to move within a five-year period actually does it. At the same time, many elderly move without having considered it long before, because sudden circumstances changes their wishes and needs of residence. Then follows a review of the pricing in the housing market as well as the difference between the costs of residence and the expenses of residence, because a misinterpretation of those two concepts can have severe consequences for the financial strain and the risk that elder home owners undertake. An empirical conclusion of yield and the standard deviation in the houwing market is made, and the correlation between the economic factors influencing the total risks that elder home owners undertake is anlysed. It was found that there is a positive correlation between the housing market and the short-term and long-tern interest rates, GNP and the stock market. Elder home owers have two possibilities of realising accumulated aquity in the owner-occupied dwelling either by raising a home-equity loan or by selling the owner-occupied dwelling and changing type of residence. It was analysed and concluded that mortgage equity withdrawal is a risky way of realising the accumulated equity in the owner-occupied dwelling, because many preconditions for calculating a possible annual amount withdrawn are heavily volatile.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2010
Number of pages87