The Unassuming Economist

From the IMF’s latest report on Austria:

“Growing vulnerabilities in the housing sector call for a stricter enforcement of prudential guidelines. According to the OeNB analysis, house prices continue to decouple from fundamentals and a share of new lending does not comply with the sustainability recommendations by the Financial Market Stability Board (FMSB). Given the continued build-up of risks and to curtail further pressures on the housing market during the recovery phase, the authorities should make binding the existing prudential guidelines for lending. In addition, as vacant inventories in office and retail stores have increased during the crisis with the shift to tele-working and online sales, the rising vulnerabilities in the commercial real estate sector warrant close monitoring of banks’ real estate exposures. To this end, the current development of granular data on the commercial real estate (CRE) is a good step to allow a close monitoring of risks.”