COVID-19; household finance; mortgage market; real estate market; Finance; Economics and Econometrics; Accounting; Business, Management and Accounting (miscellaneous); General Earth and Planetary Sciences; General Environmental Science
Abstract :
[en] 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.
Disciplines :
Finance
Author, co-author :
KOULISCHER, François ; University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Finance (DF)
Perray, Pauline; Institut National de la Statistique et des Études Économiques du Grand-Duché de Luxembourg (STATEC), Luxembourg, Luxembourg
Tran, Thi Thu Huyen ; Institut National de la Statistique et des Études Économiques du Grand-Duché de Luxembourg (STATEC), Luxembourg, Luxembourg ; Department of Economics and Management, University of Luxembourg, Luxembourg, Luxembourg
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