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The real estate market, the supply chain and credit: the effects of the great recession

Author

Listed:
  • Cristina Fabrizi
  • Raffaella Pico
  • Luca Casolaro
  • Mariano Graziano
  • Elisabetta Manzoli
  • Sonia Soncin
  • Luciano Esposito
  • Giuseppe Saporito
  • Tiziana Sodano

    (Bank of Italy)

Abstract

The supply chain of the real estate sector accounts for one fifth of Italian GDP; its importance for the banking system is even greater: lending to this sector accounts for more than one third of total loans to the private sector. The crisis in the construction and real estate sector started even before the global financial crisis of 2008 and hit firms in the sector and the banks that finance them. The fall in turnover and profitability has greatly increased the economic and financial vulnerability of firms, undermining their ability to repay their debt, particularly, in the case of large and highly leveraged firms. Due to the increase of loans classified as bad debts, the banking system has tightened conditions on new loans to this sector

Suggested Citation

  • Cristina Fabrizi & Raffaella Pico & Luca Casolaro & Mariano Graziano & Elisabetta Manzoli & Sonia Soncin & Luciano Esposito & Giuseppe Saporito & Tiziana Sodano, 2015. "The real estate market, the supply chain and credit: the effects of the great recession," Questioni di Economia e Finanza (Occasional Papers) 263, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_263_15
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2015-0263/QEF_263.pdf
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    More about this item

    Keywords

    Real estate cycle; trades; quotes; construction companies and real estate services; bank loans;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
    • 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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