Second Homes: Households' Life Dream or (Wrong) Investment?
Brunetti MariannaTorricelli Costanza
CEIS Research Paper
While purchasing the primary home is mainly motivated by essential consumption needs, a second house has generally been considered a good investment. However, second homes may result in disparate final uses, including unprofitable ones. We contribute to the scant literature on second houses by empirically investigating the cases of unrented second homes, which represent the most notable unprofitable use. We use the 2002-2012 Bank of Italy Survey on Household Income and Wealth which also provides information on real estates actual use. Our results highlight: a gender gap, whereby the unprofitable use is more frequent among male; no association with household’s economic characteristics; and, a strong association with the real estate features, with inherited dwellings more likely to be unprofitably used. Besides casting some doubts on the goodness of second homes as an investment, our results have important policy implications on the housing and rental markets, calling for policy or regulatory interventions.
Keywords: multiple homeownership, second homes, household portfolios, real-estate inheritance
JEL codes: C25, D1, D14, R2
Date: Tuesday, August 4, 2015
Revision Date: Tuesday, August 4, 2015