Pockets of risk in European Housing Markets: then and now
Julia LeBlanc and
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Jane Kelly: Central Bank of Ireland
Julia LeBlanc: Deutsche Bundesbank, Research Centre
Reamonn Lydon: Central Bank of Ireland
No 12/RT/18, Research Technical Papers from Central Bank of Ireland
Using household survey data, we document evidence of a loosening of credit standards in Euro area countries that experienced a property price boom-and-bust cycle. Borrowers in these countries exhibited significantly higher loan-to-value (LTV) and loan-to-income (LTI) ratios in the run up to the financial crisis, and an increasing tendency towards longer-term loans compared to borrowers in other countries. In recent years, despite the long period of historically low interest rates and substantial house price increases in some countries, we do not find similar credit easing as before the crisis. Instead, we find evidence of a considerable change in borrower characteristics since 2010: new borrowers are older and have higher incomes than before the crisis.
Keywords: real estate markets; macroprudential policy; systemic risk; financial crises; bubbles; financial regulation; financial stability indicators. (search for similar items in EconPapers)
JEL-codes: E5 G01 G17 G28 R39 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-eec, nep-mac and nep-ure
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