House price uncertainty in the Dutch owner-occupied housing market

Abstract

The recent decline in house prices reminds us that the uncertainty in house prices may be substantial. This uncertainty is of fundamental concern to homeowners since buying or selling a home is one of the single most important financial decisions they make. This dissertation investigates house price uncertainty in the Netherlands from a homeowner’s perspective. Since house prices are uncertain, homeowners have expectations about them. The first part of this dissertation examines how the sale price expectations of homeowners are formed in relation to mortgage commitment and residential mobility. The second part considers the size of house price risk and whether it is possible to reduce this risk through, for instance, a financial market for house value. The results in this dissertation show that house price risk may be considerable. Consequently, there may be an important role for governments in raising the awareness about this risk