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Pockets of risk in European Housing Markets: then and now


  • Kelly, Jane

    (Central Bank of Ireland)

  • Le Blanc, Julia

    (Deutsche Bundesbank, Research Centre)

  • Lydon, Reamonn

    (Central Bank of Ireland)


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.

Suggested Citation

  • Kelly, Jane & Le Blanc, Julia & Lydon, Reamonn, 2018. "Pockets of risk in European Housing Markets: then and now," Research Technical Papers 12/RT/18, Central Bank of Ireland.
  • Handle: RePEc:cbi:wpaper:12/rt/18

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    References listed on IDEAS

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    Cited by:

    1. Le Blanc, Julia & Lydon, Reamonn, 2019. "Indebtedness and spending: What happens when the music stops?," Research Technical Papers 14/RT/19, Central Bank of Ireland.
    2. Jonathan Kearns & Mike Major & David Norman, 2021. "How Risky Is Australian Household Debt?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(3), pages 313-330, September.
    3. Orsetta Causa & Nicolas Woloszko & David Leite, 2020. "Housing, Wealth Accumulation and Wealth Distribution: Evidence and Stylized Facts," LWS Working papers 30, LIS Cross-National Data Center in Luxembourg.
    4. Salvador Barrios & Cecile Denis & Viginta Ivaskaite-Tamosiune & Adriana Reut & Estefania Vazquez Torres, 2019. "Housing taxation: a new database for Europe," JRC Working Papers on Taxation & Structural Reforms 2019-08, Joint Research Centre (Seville site).
    5. Jorge E. Galán & Matías Lamas, 2019. "Beyond the LTV ratio: new macroprudential lessons from Spain," Working Papers 1931, Banco de España.
    6. Mitrašević, Mirela & Bardarova, Snezana, 2020. "Causes Of Non-Payment Of Mortgage Loans: Theoretical And Practical Aspects," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 11(2), pages 138-150.
    7. Kelly, Jane & Myers, Samantha, 2019. "Fixed-rate mortgages: building resilience or generating risk?," Financial Stability Notes 5/FS/19, Central Bank of Ireland.
    8. Jean-Charles Bricongne & Baptiste Meunier & Sylvain Pouget, 2021. "Web Scraping Housing Prices in Real-time: the Covid-19 Crisis in the UK," Working papers 827, Banque de France.

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    More about this item


    real estate markets; macroprudential policy; systemic risk; financial crises; bubbles; financial regulation; financial stability indicators.;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • G01 - Financial Economics - - General - - - Financial Crises
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • R39 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other

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