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Current risks in the CESEE residential property market: evidence from the OeNB Euro Survey

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Abstract

After a pronounced boom-bust cycle during the global financial crisis, house prices in Central, Eastern and Southeastern Europe (CESEE) are now recovering but still remain below precrisis levels. Evidence from the OeNB Euro Survey of households shows that every third household considers finding a new residence difficult, with the perceived difficulty being particularly high in areas of low bank penetration and among low income households and households whose highest level of education is primary education. Foreign currency mortgage holders are found to be more frequently in arrears in Hungary and Serbia than in other CESEE countries; the exchange rate and interest rate differential risks of foreign currency mortgages have increased in several countries, however. Loan arrears are high in general, and households in arrears are at their financial limits. At the same time, demand for housing loans is found to be increasing again.

Suggested Citation

  • Elisabeth Beckmann & Antje Hildebrandt & Krisztina Jäger-Gyovai, 2015. "Current risks in the CESEE residential property market: evidence from the OeNB Euro Survey," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 26-38.
  • Handle: RePEc:onb:oenbfi:y:2015:i:3:b:2
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    File URL: https://www.oenb.at/dam/jcr:e724269d-ca35-42f9-9772-531e6b7abf34/feei_2015_q3_studies_beckmann.pdf
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    References listed on IDEAS

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    1. Balázs Égert & Dubravko Mihaljek, 2007. "Determinants of House Prices in Central and Eastern Europe," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 49(3), pages 367-388, September.
    2. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2013. "The Determinants of Attitudes toward Strategic Default on Mortgages," Journal of Finance, American Finance Association, vol. 68(4), pages 1473-1515, August.
    3. Martin Brown & Helmut Stix, 2015. "The euroization of bank deposits in Eastern Europe," Economic Policy, CEPR;CES;MSH, vol. 30(81), pages 95-139.
    4. Alessio Ciarlone, 2015. "House price cycles in emerging economies," Studies in Economics and Finance, Emerald Group Publishing, vol. 32(1), pages 17-52, March.
    5. Nicolas Albacete & Peter Lindner, 2015. "Foreign currency borrowers in Austria – evidence from the Household Finance and Consumption Survey," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 29, pages 93-109.
    6. Antje Hildebrandt & Reiner Martin & Katharina Steiner & Karin Wagner, 2012. "Residential Property Markets in CESEE EU Member States," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 8-30.
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    Cited by:

    1. Doris Hanzl-Weiss & Michael Landesmann & Carolina Lennon, 2016. "Monthly Report No. 5/2016," wiiw Monthly Reports 2016-05, The Vienna Institute for International Economic Studies, wiiw.

    More about this item

    Keywords

    residential property markets; housing finance; household survey; Central; Eastern and Southeastern Europe;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • P2 - Economic Systems - - Socialist Systems and Transition Economies
    • P5 - Economic Systems - - Comparative Economic Systems
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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