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FX mortgages, housing boom and financial stability – a case study for Poland (2005-2015)

In: Papers presented during the Narodowy Bank Polski Workshop: Recent trends in the real estate market and its analysis - 2015 edition

Author

Listed:
  • Jacek Łaszek
  • Hanna Augustyniak
  • Krzysztof Olszewski

Abstract

Poland underwent a quick transition of the economy, but its housing market and housing policy did not change quick enough. The economic growth that followed the EU accession lead to a rising housing demand, which was fuelled by quite cheap FX denominated mortgages. Those allowed many households to satisfy their housing needs quite quickly, but combined with an insufficient housing supply lead to a price boom, that was followed by oversupply. As the housing needs started to be met, the oversupply lead to falling house prices, which in real terms reached pre-boom levels. The recent global and European economic turmoil made the Polish currency depreciate. The effect was very strong when the SNB abandoned the EUR CHF peg and some mortgage takers found themselves under water. Still the majority of the mortgage takers made a good deal and the banking sector remained stable. We present a case study, explain how the FX lending emerged and how we managed to stay safe.

Suggested Citation

  • Jacek Łaszek & Hanna Augustyniak & Krzysztof Olszewski, 2016. "FX mortgages, housing boom and financial stability – a case study for Poland (2005-2015)," Chapters from NBP Conference Publications, in: Hanna Augustyniak & Jacek Łaszek & Krzysztof Olszewski & Joanna Waszczuk (ed.), Papers presented during the Narodowy Bank Polski Workshop: Recent trends in the real estate market and its analysis - 2015 edition, chapter 3, pages v1, 87-10, Narodowy Bank Polski.
  • Handle: RePEc:nbp:nbpchp:2-3
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    Citations

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    Cited by:

    1. Świerczyńska Marta & Węglińska Mariola, 2017. "The attractiveness of FX housing loans for housholds in view of supervisory actions in selected EU countries," Financial Internet Quarterly (formerly e-Finanse), Sciendo, vol. 13(4), pages 37-53, December.

    More about this item

    Keywords

    Housing market cycles; housing finance; FX market;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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