IDEAS home Printed from https://ideas.repec.org/a/onb/oenbfs/y2024i48b3.html
   My bibliography  Save this article

From part of the problem to part of the solution: evaluating the effectiveness of borrower-based measures in Austria

Author

Listed:
  • Marcel Barmeier

    (Oesterreichische Nationalbank)

  • Selin Johanna Scheuerer

    (Oesterreichische Nationalbank)

Abstract

Evaluating macroprudential policies is key to ensuring that measures are implemented effectively. Borrower-based measures were introduced in Austria in August 2022 via the so- called KIM-V regulation that defines sustainable lending standards for residential real estate (RRE) financing. In our evaluation, we provide evidence on how effective these measures have been so far in addressing systemic risks in Austria’s RRE sector. Based on data for lending standards, we find that the KIM-V has halved the share of new lending with a debt service-to-income ratio (DSTI) above 40%. In addition, by applying estimations in a difference-in-differences setting, we find that the ratio of nonperforming loans (NPLs) of RRE loans has decreased by up to 0.5 percentage points since mid-2022. Our findings support the literature, which shows that borrower-based measures effectively reduce systemic risks in the housing sector.

Suggested Citation

  • Marcel Barmeier & Selin Johanna Scheuerer, 2024. "From part of the problem to part of the solution: evaluating the effectiveness of borrower-based measures in Austria," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 48, pages 41-54.
    • Handle: RePEc:onb:oenbfs:y:2024:i:48:b:3
    as

    Download full text from publisher

    File URL: https://www.oenb.at/dam/jcr:1e3c33ff-fe2e-4d25-a8f5-0dc172f18422/04_FSR-48_From-part-of-the-problem.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    borrower-based measures; KIM-V; financial stability; residential real estate;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:onb:oenbfs:y:2024:i:48:b:3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stefan W. Schmitz (email available below). General contact details of provider: https://edirc.repec.org/data/oenbbat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.