Commercial real estate: is there a risk of a financial bubble?

Immobilier commercial: un risque de bulle financière ?

Jerome Coffinet, Thomas Ferrière and Dorian Henricot

Bulletin de la Banque de France, 2018, issue 219, No 2

Abstract: Commercial real estate prices have been rising steadily for a number of years. In France in particular they are now higher than they were before the 2008 crisis. These high valuations appear consistent with the economic fundamentals – notably the low interest rate environment and tightness in supply relative to demand in certain segments of the market. However, the fundamentals currently differ markedly from historical levels, raising the risk that prices might correct downwards in the event of a sudden rise in interest rates or a deterioration in the economic outlook. If this were to happen, the systemic consequences would most likely be limited as commercial real estate only accounts for a small share of financial institutions’ exposures. However, we cannot rule out a possible contagion to firms and, to a lesser extent, households.

JEL-codes: E58 G12 R33 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://publications.banque-france.fr/sites/defaul ... _2_immo_en_final.pdf
https://publications.banque-france.fr/sites/defaul ... bdf219-2_immo_vf.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bfr:bullbf:2018:219:02

Access Statistics for this article

More articles in Bulletin de la Banque de France from Banque de France Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS. Contact information at EDIRC.
Bibliographic data for series maintained by Michael brassart ().