Risk and vulnerability indicators for the spanish housing market

Pana Alves, Carmen Broto, María Gil and Matías Lamas
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Pana Alves: Banco de España
María Gil: Banco de España
Matías Lamas: Banco de España

No 2314, Occasional Papers from Banco de España

Abstract: The residential real estate market has a significant weight in the Spanish economy and its performance is closely linked to that of the financial cycle. In addition, as evidenced by the real estate crisis that began in Spain in 2008, the risks generated in this sector have important implications for financial stability. The development of a framework for the early identification of risks in this market is therefore key. This article presents two complementary tools to meet this objective. The first is a heat map that provides a visual interpretation of risk levels in this market for a wide selection of individual indicators. The second is a synthetic indicator that summarizes the information provided by the individual indicators. This index complements the information of the heat map, since it measures both the intensity of the risks in each period and their composition. Both the heat map and the synthetic indicator suggest that, in recent months, the vulnerabilities that had been accumulating in the housing market since 2021 have somewhat reverted.

Keywords: housing market; early warning indicators; heat map; synthetic index (search for similar items in EconPapers)
JEL-codes: C43 G21 G51 R30 R31 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2023-07
New Economics Papers: this item is included in nep-ban, nep-rmg and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:bde:opaper:2314e

DOI: 10.53479/36275

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