allow the build-up of a panel version. However, the limited time-series dimension of our database prevents us from making any causal inferences. Second, while our mortgage depth data refer to the formal financial system, the housing loan penetration data refer to any provider of housing loans, including microfinance and informal providers, so that our access measure is broader than our depth measure. Third, this paper reports data on the depth and penetration of mortgage finance and thus leaves aside many other important dimensions of the mortgage market, including product quality and characteristics, including maturity structure, loan-to-value ratios and interest rate structure. Future work aims at extending this work and in the conclusions we will point to areas for further data collection and analysis.

The remainder of the paper is structured as follows. Section 2 presents our two main indicators of housing finance—mortgage debt to GDP and share of households with a mortgage—and some initial cross-country comparisons. Section 3 offers regression analysis to explore the cross-country covariates of housing finance development. Section 4 presents a benchmarking model. Section 5 concludes and looks forward to next steps.

# **2. Housing Finance Depth and Penetration Across Countries**

This paper relies on a comprehensive data collection exercise to construct a database on housing finance markets and other country-level variables on a global scale. The data set was compiled from different economic and financial data portals such as Doing Business, Global Financial Inclusion Database (FINDEX), World Bank Group Entrepreneurship Survey, the Housing Finance Information Network (HOFINET), World Bank’s Enterprise Surveys, World Bank’s PovcalNet, Property Rights Alliance, Stat Compiler, Bank for International Settlements (BIS), and World Development Indicators (WDI), among others.

We use two indicators of housing finance to analyze the depth and breadth of housing finance sectors. First, **Mortgage Depth** is the outstanding mortgage debt relative to GDP and gauges the depth of mortgage markets by focusing on the total volume. The construction of the first indicator involved the collection of panel data on mortgage debt outstanding in local currency on a country by country base given the absence of a single cross-country source of data.<sup>4</sup> Mortgage debt data for 38 European countries and other large economies was compiled from the European Credit Research Institute (ECRI) for the period 1995–2011. For most economies, figures on mortgage debt outstanding were compiled from the countries’ central banks, financial regulatory/oversight agencies, or housing finance agencies. For a number of countries, data were obtained through direct contact with housing finance officials during World Bank/IFC country missions or from field conferences or presentations. Gross Domestic Product (GDP) data used to compute the ratio were downloaded from the World Development Indicators Website. While for many countries, we have only one or two data points, we have at least 10 data points for 45 countries. In total, we have 938 observations for 118 countries. It is important to note that Mortgage Depth only captures formal mortgage loans from regulated financial institutions and excludes loans from non-regulated microfinance institutions and informal sources. Similarly, it excludes loans or grants from

> 4 Appendix Table A1 lists sources for all countries.

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