When leveraged home ownership increases macro-economic volatility

March 22nd 2023 | News
When leveraged home ownership increases macro-economic volatility

The Netherlands is a country of homeowners. With one of the highest percentage of homeownership in Europe (70%) and growing house prices, Dutch households have done well over recent years. After all, home ownership is an integral part of sound financial planning: Households forcibly set money aside, it is interesting from a fiscal perspective and quite frankly the only way for households to get access to significant leverage.

In a linear world without surprises, buying your family house with a mortgage is a great investment. But let’s not forget that our world is non-linear, your Real Estate investment is not liquid, most of the times highly leveraged and prone to specific risk.

“The average personal investor sits on a non-traded, highly leveraged, illiquid asset chockfull of idiosyncratic risk – the owner-occupied home.”1

Issues arise when life is not linear. In an economic downturn, the stars can align negatively for the homeowner. If house prices and employment plummet simultaneously, the combination of leverage and short-term lack of liquidity can be disastrous for the unemployed homeowner.

Taking a helicopter view, this could almost have the effect of a self-fulfilling prophecy: When many consumers can structurally not access liquidity in times of need, national consumption will be reduced, yet again impacting the economy negatively. The figure below shows that economies where households have least access to liquidity will be more volatile.

Source: CPB

At Someday, we believe that bringing flexibility back into the system helps both individual investors and society at large. We want to help consumers by giving them the option to adapt their leverage of access liquidity when they need.


1 Portfolios for Long-Term Investors” Review of Finance Volume 26, Issue 1.


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Someday provides institutional investors efficient and diversified access to owner-occupied residential real estate across The Netherlands.

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