Housing Standards 2004/2005
Financing Housing and Refurbishing Housing Estates
Lux M., P. Sunega, T. Kostelecký, D. Čermák, J. Montag
Prague: The Institute of Sociology, Academy of Sciences of the Czech Republic
3. Market-Based Financing of Owner-Occupied Housing in the Transition Countries
3.1 Introduction
The first part of this chapter contains a description of the development of market-based home financing in the countries of Central and Eastern Europe (CEE) up to 2000, and the second art describes how these systems developed further after 2000. In the introduction some general basic preconditions for the development of market-based home financing are mentioned, such as:
- economic growth;
- a relatively low inflation rate;
- a rise in real wages;
- a majority of the population perceives their employment position as stable.
In addition to favourable economic indicators other essential preconditions are:
- the introduction of the necessary legislation to grant mortgage loans;
- a reduction in the "crowding-out" effect of state subsidies;
- the introduction of bank reforms;
- the creation of additional stimuli for a functioning housing market (for example, privatisation).
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