The Unassuming Economist

Showing posts with label Global Housing Watch.   Show all posts

Thursday, July 23, 2015

House Prices in Japan

“Land and real estate prices have bottomed out in most market segments and condominium prices in metropolitan areas are rising again after a two-decade slump,” notes the IMF report on Japan.

“Land and real estate prices have bottomed out in most market segments and condominium prices in metropolitan areas are rising again after a two-decade slump,” notes the IMF report on Japan.

Read the full article…

Posted by Prakash Loungani at 2:56 PM

Labels: Global Housing Watch

Monday, July 20, 2015

LTV and DTI Limits—Going Granular

A new IMF paper by Luis I. Jácome and Srobona Mitra looks at how loan-to-value (LTV) and debt-service-to-income (DTI) limits work in practice (Brazil, Hong Kong SAR, Korea, Malaysia, Poland, and Romania). The authors find that “(…) rapid growth in high-LTV loans with long maturities or in the number of borrowers with multiple mortgages can be signs of build up in systemic risk; monitoring nonperforming loans by loan characteristics can help in calibrating changes in the LTV and DTI limits; as leakages are almost inevitable, countries strive to address them at an early stage; and, in most cases, LTVs and DTIs were effective in reducing loan-growth and improving debt-servicing performances of borrowers, but not always in curbing house price growth.”

A new IMF paper by Luis I. Jácome and Srobona Mitra looks at how loan-to-value (LTV) and debt-service-to-income (DTI) limits work in practice (Brazil, Hong Kong SAR, Korea, Malaysia, Poland, and Romania). The authors find that “(…) rapid growth in high-LTV loans with long maturities or in the number of borrowers with multiple mortgages can be signs of build up in systemic risk; monitoring nonperforming loans by loan characteristics can help in calibrating changes in the LTV and DTI limits; Read the full article…

Posted by Prakash Loungani at 6:26 PM

Labels: Global Housing Watch

Housing Market in Lebanon

“Risks could arise following a sharper downturn of the real estate market. A sizable fraction of bank loans to the private sector have been directed at the real estate sector, where activity is softening. But, in the absence of a price index, the number and value of property sales can serve as a proxy for the housing cycle. Both indicators grew by close to 3 percent in 2014. This is slightly more than the 2009–14 average for the number of transactions, but well below the past average for the value of sold properties (around 11 percent)”, says the IMF’s latest report on Lebanon.

“Risks could arise following a sharper downturn of the real estate market. A sizable fraction of bank loans to the private sector have been directed at the real estate sector, where activity is softening. But, in the absence of a price index, the number and value of property sales can serve as a proxy for the housing cycle. Both indicators grew by close to 3 percent in 2014. This is slightly more than the 2009–14 average for the number of transactions, Read the full article…

Posted by Prakash Loungani at 6:09 PM

Labels: Global Housing Watch

Wednesday, July 15, 2015

House Prices in Germany

“The moderate upward trend in housing prices continues and the appropriate response at this stage is close monitoring and readying the macroprudential toolkit. After years of stagnation, nominal housing prices at the aggregate level have grown at an annual pace of 3–4 percent for the past five years—only marginally faster than the growth in disposable income. In spite of falling lending rates, mortgage loan growth remains modest and lending standards appear stable. Thus, there are no signs of overheating yet. Nonetheless, developments in the most dynamic segments, such as apartments in large cities, deserve particular supervisory attention, and efforts to step up data collection on mortgage loan terms and conditions need to continue, including because of a significant share of high reported loan-to-value ratios (LTVs) in those segments in a recent Bundesbank survey. Last December, the Financial Stability Committee (FSC) announced that it was examining an expansion of the German macroprudential toolkit, as recommended by the FSB and the Fund last year. Introducing instruments constraining mortgage loan eligibility, such as loan-tovalue and debt-service-to-income limits, would be very helpful, not only because they might be needed in the future, but also because of the signaling value of this policy decision. A carefully designed communication strategy would help make the most of this signaling value,” according to the latest IMF report on Germany. 

“The moderate upward trend in housing prices continues and the appropriate response at this stage is close monitoring and readying the macroprudential toolkit. After years of stagnation, nominal housing prices at the aggregate level have grown at an annual pace of 3–4 percent for the past five years—only marginally faster than the growth in disposable income. In spite of falling lending rates, mortgage loan growth remains modest and lending standards appear stable. Thus, there are no signs of overheating yet. Read the full article…

Posted by Prakash Loungani at 6:52 PM

Labels: Global Housing Watch

Tuesday, July 14, 2015

Housing Market in Poland

On foreign-currency mortgages, the new IMF report on Poland says that “While tighter prudential regulation has halted new FX lending, a substantial legacy stock of these loans remains. Close to half of mortgages are denominated in FX (mostly Swiss franc), exposing households and banks to sudden zloty depreciation—as was the case in January when the zloty depreciated around 20 percent against the Swiss franc. As such, the January episode had little macroeconomic impact and high capital buffers in banks mitigated financial stability risks. In addition, the availability of emergency liquidity assistance from the NBP, supported by the swap line with the Swiss National Bank, further mitigated risks (…).”

On foreign-currency mortgages, the new IMF report on Poland says that “While tighter prudential regulation has halted new FX lending, a substantial legacy stock of these loans remains. Close to half of mortgages are denominated in FX (mostly Swiss franc), exposing households and banks to sudden zloty depreciation—as was the case in January when the zloty depreciated around 20 percent against the Swiss franc. As such, the January episode had little macroeconomic impact and high capital buffers in banks mitigated financial stability risks. Read the full article…

Posted by Prakash Loungani at 6:52 PM

Labels: Global Housing Watch

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