HOME OWNERSHIP FINANCE IN AUSTRIA AND GERMANY

This paper studies the financial barriers to ownership entry in Austri a and Germany. In both countries the financial institutions are simila r but there are differences as to public assistance, mortgage markets and risk allocation. Various risk shifting mechanisms between borrower s, banking and the state, and their impacts on social costs and social efficiency, are discussed. The findings indicate possible credit-rati oning as an outcome of the current securitization methods used in Aust rian and German bank intermediation and their interaction with subsidy and tax allowance instruments. The existing entry barriers have raise d concerns among the current decision makers and may initiate financia l reforms in the near future.