To Rent or to Buy – Analysis of Housing Tenure Choice Determined by Housing Policy

The article discusses the relatively large share of owner-occupied housing in the housing stock in selected European countries with relatively low per capita income and describes the underlying causes of this phenomenon. We also identify the economic implications of the growing number of owneroccupied housing and poorly developed rental market. The paper analyses home purchase or rental decisions and explains the correlations between housing availability, consumption and households’ savings, as well as housing policy and investigates this question empirically. The way in which the development of the rental market can improve the situation in the property market is presented on the basis of a simple model.