The Unassuming Economist

From a VoxEU post by Ken Rogoff:

“The Chinese economy was able to sharply rebound from the Covid pandemic, helping to sustain a housing boom. The country faces a multitude of challenges over the medium term, however, on top of the much more virulent Delta variant. This column argues that the footprint of China’s real estate sector has become so large – with real estate production and property services accounting for 29% of the country’s GDP – that absorbing a significant housing slowdown would significantly impact overall growth, even absent a financial crisis.”

From the IMF’s latest report on Belgium:

“Increased vulnerabilities from real estate call for supervisory vigilance and possible use of macroprudential policies to mitigate stability risks. Despite the crisis, prices of residential and some commercial RE segments (e.g., logistics) have risen, also supported by low interest rates. In addition, house prices benefitted from the channeling of some of the excess savings accumulated during the pandemic (€25 billion, 5½ percent of GDP, in 2020) into residential properties. In a market correction the quality of RE assets, which account for a sizable share of financial-sector portfolios, may deteriorate. The NBB has appropriately maintained a risk-weight add-on for housing loans in place since December 2013 and affirmed December 2019 supervisory expectations that set limits on riskier mortgage lending. Market developments should be closely monitored for price misalignments. If imbalances mount, macroprudential tightening should be considered to constrain lending to highly-leveraged borrowers and strengthen buffers, also encompassing the commercial segment.”

From the IMF’s latest report on the Philippines:

From the IMF’s latest report on Lithuania:

“The positive developments in the housing market so far are estimated to be in line with fundamentals. However, if signs of elevated risks in particular sectors or overheating of the economy start to emerge, targeted macroprudential tools or reactivation of the CCyB will be necessary.”

From the IMF’s latest report on Latvia:

“While real estate prices have been on a prolonged uptrend, robust wage growth and similar price dynamics in regional peers suggest that house prices remain broadly aligned with fundamentals. However, the expected surge in construction, backed by a large inflow of EU-investment funds, could renew overvaluation concerns in property prices.”