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
3.5 Conclusions on the Development of Market-Based Financing of Owner-Occupied Housing in 1990 - 2000
- Growth in the demand for market-based home financing was slow even after overall macroeconomic stabilisation owing to the specific consumption patterns and other factors affecting the demand for these products in the post-communist countries.
- The basic preconditions for the successful spread of market-based home financing proved to be low and stable inflation, an increase in real wages, a stabilised banking sector, and the introduction of the requisite legislation.
- Building savings programmes presented the transition countries with many advantages. Because of the limited experience on the part of the responsible administrative and political representatives, however, the programmes were not very effectively set up, especially the closed systems of building savings (Bausparkasse), which drew criticism from the ranks of experts.
- The secondary mortgage market could be interesting for the larger countries in the CEE region (Russia), which have to deal with banks with poor liquidity owing to the low level of trust the population has in financial institutions (as a result of financial crises) and the unstable situation in the banking sector. The complexity with which it is set up however in the end has led to the fact that a secondary loan market has not de facto taken off in any of the transition countries to date (leaving aside some formal matters) and in the case of Poland (the foundation of the Mortgage Loan Fund) such an attempt was a complete failure.
- The effective enforcement of the law proved to be just as important as very adoption of the relevant legislation. "It became evident that finding effect ways of enforcing the law is more difficult than creating new laws." (Hegedüs 2002: 17).
|
