European Housing Markets at a Turning Point – Risks, Household and Bank Vulnerabilities, and Policy Options PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download European Housing Markets at a Turning Point – Risks, Household and Bank Vulnerabilities, and Policy Options PDF full book. Access full book title European Housing Markets at a Turning Point – Risks, Household and Bank Vulnerabilities, and Policy Options by Ms. Laura Valderrama. Download full books in PDF and EPUB format.
Author: Ms. Laura Valderrama
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 47
Get Book Here
Book Description
European housing markets are at a turning point as the cost-of-living crisis has eroded real incomes and the surge in interest rates has made borrowers more vulnerable to financial distress. This paper aims to (i) shed light on the risks in European housing markets, (ii) quantify household vulnerabilties, (iii) assess banking sector implications and (iv) examine policies’ effectiveness using simulations based on microdata from the Household Finance and Consumption Survey (HFCS) and EU statistics on income and living conditions (EU-SILC). Under the baseline IMF macroeconomic forecast, the share of households that could struggle to meet basic expenses could rise by 10 pps reaching a third of all households by end 2023. Under an adverse scenario, 45 percent of households could be financially stretched, representing over 40 percent of mortgage debt and 45 percent of consumer debt. The impact on the banking sector seems contained under the baseline forecast, though there are pockets of vulnerability. A 20 percent house price correction could deplete CET1 capital by 100-300 basis points. Fiscal measures, such as subsidies to the bottom income tercile, could save 7 percent of households from financial distress at an estimated cost of 0.8 percent of GDP.
Author: Ms. Laura Valderrama
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 47
Get Book Here
Book Description
European housing markets are at a turning point as the cost-of-living crisis has eroded real incomes and the surge in interest rates has made borrowers more vulnerable to financial distress. This paper aims to (i) shed light on the risks in European housing markets, (ii) quantify household vulnerabilties, (iii) assess banking sector implications and (iv) examine policies’ effectiveness using simulations based on microdata from the Household Finance and Consumption Survey (HFCS) and EU statistics on income and living conditions (EU-SILC). Under the baseline IMF macroeconomic forecast, the share of households that could struggle to meet basic expenses could rise by 10 pps reaching a third of all households by end 2023. Under an adverse scenario, 45 percent of households could be financially stretched, representing over 40 percent of mortgage debt and 45 percent of consumer debt. The impact on the banking sector seems contained under the baseline forecast, though there are pockets of vulnerability. A 20 percent house price correction could deplete CET1 capital by 100-300 basis points. Fiscal measures, such as subsidies to the bottom income tercile, could save 7 percent of households from financial distress at an estimated cost of 0.8 percent of GDP.
Author: Ms. Laura Valderrama
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 24
Get Book Here
Book Description
Since the pandemic, developments in the real estate market in Portugal suggest that housing vulnerabilities have increased. Rising living costs and interest rates are stretching household finances which could cause an increase in defaults or force households to cut back on consumption. Simulation results suggest that, under adverse conditions, almost half of all households could be financially stretched with a disproportionate effect on lower income households. In addition, one third of consumers may need to adjust spending although the estimated reduction in aggregate consumption is limited. The impact on the banking system is manageable but a sharp house price correction could have a material impact on capital buffers. Policy support aimed at tacking the cost of living crisis could help mitigate some of these risks.
Author: Robert C. M. Beyer
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 34
Get Book Here
Book Description
The extent to which changes in monetary policy rates lead to changes in loan and deposit rates for households and firms, referred to as ‘pass-through’, is an important ingredient of monetary policy transmission to output and prices. Using data on seven different bank interest rates in 30 European countries, different approaches, and the full sample as well as a subsample of euro area countries, we show that a) the pass-through in the post-pandemic hiking cycle has been heterogenous across countries and types of interest rates; b) the pass-through has generally been weaker and slower, except for rates of non-financial corporation loans and time deposits in euro area countries; c) differences in pass-through over time and across countries for most deposit rates are correlated with financial sector concentration, liquidity, and loan opportunities, and d) the effects of pass-through to outstanding mortgage rates on monetary transmission on prices and output are heterogenous across countries.
Author: International Monetary Fund. European Dept.
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 22
Get Book Here
Book Description
Cyprus: Selected Issues
Author: Robert C. M. Beyer
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 13
Get Book Here
Book Description
Residential house prices in Cyprus show no signs of overvaluation in international comparison, and various indicators confirm that prices are aligned with economic fundamentals. However, still-high household debt poses a risk. Regional disparities raise some concerns about affordability, notably in Limassol, calling for supply-side measures to increase housing supply.
Author: Rob Nijskens
Publisher: Springer
ISBN: 3030116743
Category : Business & Economics
Languages : en
Pages : 220
Get Book Here
Book Description
This open access book discusses booming housing markets in cities around the globe, and the resulting challenges for policymakers and central banks. Cities are booming everywhere, leading to a growing demand for urban housing. In many cities this demand is out-pacing supply, which causes house prices to soar and increases the pressure on rental markets. These developments are posing major challenges for policymakers, central banks and other authorities responsible for ensuring financial stability, and economic well-being in general.This volume collects views from high-level policymakers and researchers, providing essential insights into these challenges, their impact on society, the economy and financial stability, and possible policy responses. The respective chapters address issues such as the popularity of cities, the question of a credit-fueled housing bubble, the role of housing supply frictions and potential policy solutions. Given its scope, the book offers a revealing read and valuable guide for everyone involved in practical policymaking for housing markets, mortgage credit and financial stability.
Author: International Monetary Fund. Monetary and Capital Markets Department
Publisher: International Monetary Fund
ISBN:
Category :
Languages : en
Pages : 103
Get Book Here
Book Description
Spain’s economy and its well-developed, bank-dominated financial system have shown resilience through the pandemic, rising global geo-political tensions and tighter financial conditions. The economy remains near potential and growth is projected to continue its robust performance in the coming quarters. The long running trend of deleveraging by households (HHs) and nonfinancial corporates (NFCs) continues, activity is cooling and very moderate overvaluation receding in the housing market, commercial real estate valuations remain below pre-pandemic levels, and foreign investments in the real estate market are on the rise.
Author: International Monetary Fund. Monetary and Capital Markets Department
Publisher: International Monetary Fund
ISBN:
Category :
Languages : en
Pages : 44
Get Book Here
Book Description
Strong policy support and high financial buffers are helping the financial sector weather the consecutive shocks, but pre-pandemic vulnerabilities have continued to rise. Ultra loose financial conditions, in part as a consequence of ECB’s monetary policy, have contributed to increased households’ indebtedness and stretched asset prices. Specifically, real estate prices had grown rapidly over 2018–22 with signs of overvaluation. Households’ indebtedness continued to rise, although partly mitigated by high households’ net wealth. These mounting real estate vulnerabilities prompted measures from the authorities, including on the macroprudential front, that bolstered the resilience of the banking sector but had mixed effects on the risk profile of new mortgages. The average LTV has dropped but the impact on DSTI and DTI has been more muted.
Author: International Monetary Fund. European Dept.
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 40
Get Book Here
Book Description
Economic growth has tumbled across Europe, inflation remains too high, and financial sector risks have materialized. Taming sticky inflation while avoiding financial stress and a recession will require tighter macroeconomic policies—tailored to changing financial conditions, stronger financial regulation and supervision, and bolder supply-side reforms that heal scars from the COVID-19 and energy crises.
Author: Mindaugas Leika
Publisher: International Monetary Fund
ISBN: 1484326792
Category : Business & Economics
Languages : en
Pages : 56
Get Book Here
Book Description
Household financial fragility has received considerable attention following the global financial crisis, but substantial gaps remain in the analytical underpinnings of household financial vulnerability assessment, as well as in data availability. This paper aims at integrating the contributions in the literature in a coherent fashion. The study proposes also analytical and estimation extensions aimed at improving the quality of estimates and allowing the assessment of household financial vulnerability in presence of data limitations. The result of this effort is a comprehensive framework, that has wide applicability to both advanced and developing economies. For illustrative purposes the paper includes a detailed application to one developing country (Namibia).
