House Purchase versus Rental in Spain
- Ortega, Eva
- Rubio Sánchez, Margarita
- Thomas, Carlos
- Iza Padilla, Amaia comp.
ISSN: 0026-959X
Año de publicación: 2011
Número: 232
Páginas: 109-151
Tipo: Artículo
Otras publicaciones en: Moneda y crédito
Resumen
One of the most salient features of the Spanish housing market, compared to other European economies, is its relatively low rental share. This may be partly attributed to the existence of fiscal distortions in Spain favoring ownership. In this paper, we simulate the potencial effects of different policy measures aimed at homogenizing the fiscal treatment of ownweship and renting and improving the efficiency of the rental market. We do so in the context of a DSGE model featuring a market for owner-occupied and rented housing, as well as collateral constraints in loan markets. We find that eliminating the existing subsidy to houde purchases, introducing a comparable subsidy to rental payments or increasing the efficiency in the production of housing rental services raise the rental share by a similar amount. However, their implications in terms of the construction sector differ.