Owner-occupiers (particularly those with a mortgage) and those who claim to be more financially literate are also more likely to consider housing as a good investment than households that do not own a home, do not have a mortgage or do not consider themselves very financially literate. On average, older consumers and males report a greater willingness to invest in housing than younger consumers and females. Looking at the different characteristics of households surveyed in the CES, there are striking variations in the perceptions of the attractiveness of housing as an investment across specific groups (Chart B). Households perceive housing as an investment differently depending on their demographic and economic characteristics. The value for Q2 2023 corresponds to the average of monthly data for April and May 2023. Notes: Households’ perceptions of housing as an investment measures the share of respondents who consider buying a property in their neighbourhood today to be a “good” or “very good” investment. Sources: Eurostat, CES and ECB staff calculations. (left-hand scale: year-on-year percentage changes right-hand scale: percentages of respondents) Housing investment and households’ perceptions of housing as an investment This box analyses the factors determining household perceptions of the attractiveness of housing as an investment using CES data on household characteristics and expectations, thereby shedding light on the reasons for the recent slowdown in housing investment. Since the turn of the year, these perceptions have recovered somewhat but remain at a low level. Indeed, household perceptions of housing as a good investment were a relatively good leading indicator of the weakness in housing investment that began in the second quarter of 2022, with household perceptions falling from their peak in the second quarter of 2021 to a low point in the first quarter of 2023 (Chart A). The proportion of positive responses to this question then may be used as a proxy of housing demand, which is an important driver of housing investment. In the ECB’s Consumer Expectations Survey (CES), households are regularly asked whether they think buying a property in their neighbourhood today is a good or bad investment. The deterioration in household perceptions of housing as a good investment preceded the recent decline in housing investment in the euro area. Published as part of the ECB Economic Bulletin, Issue 5/2023. Prepared by Niccolò Battistini, Evangelos Charalampakis, Johannes Gareis and Desislava Rusinova
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