Families and the Reproduction of Homeownership in a Post-socialist Context

Post-socialist countries introduced significant reforms in their housing systems and these included property restitution, privatisation, and housing subsidy cuts. Housing privatisation served as the main catalyst for the sharp increase in the outright homeownership rate that became a characteristic feature of post-socialist countries. The retreat of the state was not offset by the development of the institutions or cultures that fully financialised housing markets require. Debt-free homeownership created a gap in housing welfare that was filled by households in the form of intergenerational assistance and self-built housing. Our chapter will demonstrate how tenure preferences have changed since 1990 and how a new tenure norm that deems homeownership the superior form of housing tenure was established in the Czech Republic. Using survey data we will show that intergenerational within-family financial (wealth) transfers represent the main mechanism in the reproduction of homeownership in Czech society. The provision of a transfer or the lack of one largely determines the housing tenure of Czech young adults. We will also show the significance of the motive of indirect reciprocity in intergenerational transfer behaviour, i.e. that the probability of an adult child receiving a transfer is closely linked to the fact of whether the parents also received a transfer from their parents in the past. Finally, we will analyse the consequences that the current housing system based on outright homeownership and intergenerational financial transfers fuelled by the motive of indirect reciprocity have had on the trends in housing wealth inequalities between 2010 and 2016 in the Czech Republic.