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Pockets of risk in the Belgian mortgage market : Evidence from the Household Finance and Consumption Survey (HFCS)

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  • Philip Du Caju

    () (Economics and Research Department, NBB)

Abstract

This paper complements macroeconomic indicators for macroprudential policy with information from microeconomic survey data from the Household Finance and Consumption Survey (HFCS), to identify pockets of risk in the Belgian mortgage market. It takes into account distributional aspects of debt and assets, with a special focus on the coverage of households’ mortgage debt by (liquid)financial assets. It identifies the share of outstanding mortgage debt that is possibly at risk, and the parts of the population most affected, on the basis of income and assets-related debt indicators. The first finding is that some groups of households have problems servicing their debt out of their income and some lack the financial resources to cope with income loss. The second finding is that Belgian households’ considerable financial wealth is (very) unequally distributed, and that therefore this wealth covers their outstanding mortgage debt only to a limited extent. As a consequence, a severe unemployment shock could hurt many mortgage-indebted households, involving a significant part of total outstanding mortgage debt in Belgium. All in all, this paper shows that survey data can complement macro data for macroprudential policy purposes.

Suggested Citation

  • Philip Du Caju, 2017. "Pockets of risk in the Belgian mortgage market : Evidence from the Household Finance and Consumption Survey (HFCS)," Working Paper Research 332, National Bank of Belgium.
  • Handle: RePEc:nbb:reswpp:201712-332
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    File URL: https://www.nbb.be/doc/oc/repec/reswpp/wp332en.pdf
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    References listed on IDEAS

    as
    1. Ph. Du Caju, 2016. "The distribution of household wealth in Belgium : initial findings of the second wave of the Household Finance and Consumption Survey (HFCS)," Economic Review, National Bank of Belgium, issue ii, pages 27-43, september.
    2. Ph. Du Caju & Th. Roelandt & Chr. Van Nieuwenhuyze & M.-D. Zachary, 2014. "Household indebtedness : evolution and distribution," Economic Review, National Bank of Belgium, issue ii, pages 61-81, September.
    3. Eurosystem Household Finance and Consumption Network, 2013. "The Eurosystem Household Finance and Consumption Survey - Methodological report," Statistics Paper Series 1, European Central Bank.
    4. Olympia Bover & Jose Maria Casado & Sonia Costa & Philip Du Caju & Yvonne McCarthy & Eva Sierminska & Panagiota Tzamourani & Ernesto Villanueva & Tibor Zavadil, 2016. "The Distribution of Debt across Euro-Area Countries: The Role of Individual Characteristics, Institutions, and Credit Conditions," International Journal of Central Banking, International Journal of Central Banking, vol. 12(2), pages 71-128, June.
    5. B. De Backer & Ph. Du Caju & M. Emiris & Ch. Van Nieuwenhuyze, 2015. "Macroeconomic determinants of non-performing loans," Economic Review, National Bank of Belgium, issue iii, pages 47-65, December.
    6. Eurosystem Household Finance and Consumption Network, 2013. "The Eurosystem Household Finance and Consumption Survey - Results from the first wave," Statistics Paper Series 2, European Central Bank.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Household finance; Financial Fragility; Mortgage markets; Survey; HFCS;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • 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
    • K35 - Law and Economics - - Other Substantive Areas of Law - - - Personal Bankruptcy Law

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