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COVID-19 and the Mortgage Market in Luxembourg
[journal article]
Abstract With a ratio of household debt to gross disposable income above 150%, households in Luxembourg are among the most indebted in Europe. A high level of debt exacerbates the sensitivity of household net worth to changes in house prices, which can increase the severity of economic downturns. In this not... view more
With a ratio of household debt to gross disposable income above 150%, households in Luxembourg are among the most indebted in Europe. A high level of debt exacerbates the sensitivity of household net worth to changes in house prices, which can increase the severity of economic downturns. In this note, we evaluate the implications of the COVID-19 crisis for the mortgage market in Luxembourg using data on the labour market and government interventions, as well as surveys of consumer finances (HFCS). Our conclusions are twofold. At the aggregate level, the Luxembourg mortgage market is relatively well placed to weather the shock, because a large share of residents work in sectors that are less affected by the crisis such as the financial or government sectors. However, our analysis of micro-level survey data suggests that some segments of the population may be financially vulnerable to the COVID-19 shock.... view less
Keywords
contagious disease; epidemic; Luxembourg; real estate; private household; indebtedness; assets
Classification
Sociology of Economics
Free Keywords
Corona; COVID-19; Corona-Virus; household finance; real estate market; mortgage market; EU-SILC 2019
Document language
English
Publication Year
2022
Page/Pages
p. 1-24
Journal
Journal of Risk and Financial Management, 15 (2022) 3
DOI
https://doi.org/10.3390/jrfm15030114
ISSN
1911-8074
Status
Published Version; peer reviewed