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Pockets of risk in European housing markets: then and now

Jane Kelly, Julia Le Blanc and Reamonn Lydon

No 2277, Working Paper Series from European Central Bank

Abstract: 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. JEL Classification: E5, G01, G17, G28, R39

Keywords: financial crisis; financial regulation; financial stability; macroprudential policy; survey data (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec and nep-ure
Date: 2019-05
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Related works:
Working Paper: Pockets of risk in European housing markets: then and now (2019) Downloads
Working Paper: Pockets of risk in European Housing Markets: then and now (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20192277

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