Which are the determinants of homeownership ? A logit analysis for the case of Belgium

In market-oriented economies, high rates of homeowners are traditionally associated with positive economic effects and externalities. For this reason, public authorities have encouraged homeownership for the last decades through taxation or subsidies policies. In Belgium, owner-occupation has been promoted since the end of the nineteenth century and homeownership policy is considered as a key element of the Welfare state. Furthermore, the effectiveness of these policies is fundamentally based on a clear understanding of what determines homeownership. Therefore, the analysis of tenure determinants can provide inputs for the definition or the renewal of housing, taxation and subsidies policies. Considering this interest, this paper investigates the issue of housing tenure in Belgium. On the basis of previous related research, a model of tenure choice is estimated using a sample of 6,962 households. The observations follow clearly the general trends described for other countries. Higher income and age, couple status and the presence of dependent children have positive influences on homeownership. In addition, locations presenting a high density of population and a high centrality are associated with a lower probability of homeownership compared with other areas. The underlying significations of these variables are discussed in the paper.