The Unassuming Economist

From the IMF’s latest report on the Philippines:

“The near-boom credit episodes detected between 2014 and early 2018 coincided with strong lending growth in the real estate sector. The latter contributed importantly to the strong overall lending growth of close to 20 percent during this period. Notwithstanding some moderation recently, credit to real estate has continued to outpace that in manufacturing and other sectors. It now accounts for the largest share in total loans outstanding (18 percent).

Strong property demand from a few key players drove the real estate credit growth. The recent rise of Chinese online gaming companies operating in the Philippines (Philippines Offshore Gaming Operators—POGO) has led to a large inflow of Chinese workers and increased demand for residential and office properties. The dynamic business process outsourcing (BPO) industry has been another important driver of property demand, while demand for residential housing has also remained strong. Property prices have risen in this environment, translating into higher credit needs for many buyers.

The quality of real estate loans remains sound, despite a recent uptick in NPLs. As of end-2018:Q2, NPL ratios for real estate loans were at record low levels after a steady decline. The relatively stable NPL ratio for residential loans has not followed the continuous decrease in the NPL ratio of commercial real estate loans. This could partly reflect the fact that the 20 percent limit on the share of total bank loans to commercial real estate is binding, which could be keeping bank lending focused on high-quality projects.

Continued strong real house price increases amid the cooling in residential real estate lending suggests a need for close monitoring of related market risks. House price increases in 2018 were broadly similar to those in 2017 despite the slowdown in real estate credit growth. The latter could have partly reflected the tighter lending requirements to the real estate sector in effect since mid-2018.3 Meanwhile, the increase in real house prices could be associated with high real estate demand from POGO companies and workers, which typically does not involve credit from the domestic banking system, or, possibly, increased shadow-banking activities by real estate developers, with increased indirect exposure by domestic banks.

BSP has introduced several macroprudential measures to identify and prevent the buildup of financial stability risks. These include Basel III Liquidity and Net Stable Funding Ratios, and a countercyclical capital buffer (CCyB), which has not yet been activated, as well as the Real Estate Stress Test (REST), real estate sectoral exposure limits, and mortgage collateral value limits. The Philippines’ Macroprudential Policy Measures (Box 2) discusses in greater detail the prudential measures introduced by the BSP since 2007, including newly-introduced measures on the real estate sector credit.”

On cross-country:

• The ECB considers counting owner-occupied housing in inflation – Economist, Financial Times, Bloomberg
• Watch: ING International Survey: Homes & Mortgages – ING
• Housing market polarises opinion between the haves and have-nots – ING
• Saving priorities reflect home ownership challenge – ING

On the US:

• America’s Rental Affordability Crisis is Climbing the Income Ladder – Harvard Joint Center for Housing Studies
• America’s Rental Housing 2020 – Harvard Joint Center for Housing Studies
• U.S. renters are richer, older, and have larger households – Curbed
• California, Mired in a Housing Crisis, Rejects an Effort to Ease It – New York Times
• Demystifying GSE Credit Risk Transfer: How, and How Well, Does It Work? – Harvard Joint Center for Housing Studies
• The Housing Bill Is Dead. Long Live the Housing Bill? – New York Times
• Column: Suburban sprawl wins again in the battle against California’s housing crisis – Los Angeles Times
• To Unleash Housing Supply, Allow and Finance Accessory Dwelling Units – Urban Institute
• Is the Sudden Increase in Black Homeownership Too Good to Be True? – Urban Institute
• All Five Federal Mortgage Programs Should Treat Student Loan Debt the Same Way – Urban Institute
• Labor Conditions Are a Big Factor in Our Current Housing Supply Challenges – Urban Institute
• Housing Finance At A Glance: A Monthly Chartbook, January 2020 – Urban Institute
• In the Land of Big Tech Outposts, a Push for More Housing – Wired
• Three lessons 21st century housing policy could learn from “Little Women” – Brookings

On other countries:

• [China] China’s property market stalls amid coronavirus outbreak – Financial Times
• [Ireland] Irish housing crisis derails Varadkar’s re-election bid – Reuters
• [Netherlands] Luxury Home Buyers Are Revamping Amsterdam’s Historic Housing Stock – Wall Street Journal

From the IMF’s latest report on Guyana:

“Guyana’s residential real estate prices have been rising, particularly in the capital city Georgetown, following the discovery of oil in 2015. In line with the growing demand for housing, commercial banks’ housing loans have increased, prompting higher household debt. This paper presents two analyses which suggest that housing prices in Georgetown and banks’ lending to the housing sector appear to be in their early stages of growth. However, given the data limitations and caveats that underpin the analyses, the findings could also indicate early signals of possible risks. Further data collection would support surveillance and deeper studies. At the same time, enhancing prudential measures would help safeguard financial and macroeconomic stability. These include strengthening the monitoring of the housing market, bank lending practices and household debt, as well as fortifying the macroprudential framework, including with more effective toolkits for early intervention.”

On cross-country:

• New Risk to World Economy: Synchronized Housing Slowdown – Wall Street Journal

On the US:

• Refinancing Boom Fuels Mortgages to Postcrisis Record – Wall Street Journal
• Housing speculation and its economic consequences – VOX
• Texas Housing Insight – Real Estate Center Texas A&M University
• Average U.S. Home Seller Profits Hit $65,500 in 2019, Another New High – ATTOM Data Solutions
• The Trump administration’s new housing rules will worsen segregation – Economic Policy Institute
• The Folly Of Bernie Sanders’ National Rent Control Proposal – Cato
• Everything You Think You Know About Housing Is Probably Wrong – New York Times
• Concentration in Mortgage Markets: GSE Exposure and Risk-Taking in Uncertain Times – Federal Reserve Bank of Philadelphia

On other countries:

• [Cambodia] Cambodia has oversupply of housing market – Global Property Guide
• [Finland] Housing market in Finland stays weak – Global Property Guide
• [Puerto Rico] Puerto Rico’s housing market bounced back strongly – Global Property Guide
• [United Arab Emirates] Dubai steps up efforts to revive property market – Financial Times
• [United Kingdom] Number of young homeowners catches up with private renters once more – Financial Times
• [Vietnam] Positive outlook for Vietnam’s property market – Global Property Guide

On cross-country:

• OECD Affordable Housing Database – OECD
• 16th Annual Demographia International Housing Affordability Survey – Demographia
• The 11 most expensive cities to live in around the world in 2020 – Insider
• Prerequisites to getting Africa’s urbanization ‘right’ – Brookings

On the US:

• The Outlook for Housing – Fed
• Housing Supply Chartbook – Urban Institute
• Slight Gains in 2020 Outlook for Residential Remodeling – Harvard Joint Center for Housing Studies
• Why Manhattan’s Skyscrapers Are Empty – The Atlantic
• How the trade war impacts regional economies and housing markets – Builder
• The slowdown in the US housing market – Central Bank of Spain
• Who’s to blame for high housing costs? It’s more complicated than you think. – Brookings
• Planet Money: Single Women Are Shortchanged In The Housing Market – NPR
• What’s Ahead for the U.S. Housing Market in 2020? – Wharton Business Daily
• Are Housing Markets Still Clearing out the Trash of the Last Bust? – Mises Institute
• Opinion: How unfair mortgage and housing practices affect you and your neighborhood — and what can be done about it – Market Watch
• She Almost Lost Her Home In California’s Wildfires. Instead She Built A $200 Million Business. – Forbes
• Changing supply elasticities and regional housing booms – Bank of England
• Institutional Investors’ Impact on the Housing Market – Urban Institute
• Here’s How Many New Homes It Would Take To Fix The Housing Shortage – Forbes
• Eight ways travelers can fight ‘the Airbnb effect’ on local housing costs – Washington Post

On other countries:

• [China] Magnification of the “China Shock” Through the U.S. Housing Market – VoxChina
• [Hong Kong] Pressure building on rental market amid continued stress – RICS
• [United Arab Emirates] UAE’s housing market remains gloomy – Global Property Guide
• [United Kingdom] Housing equity used to fund home improvements, not future care needs – Financial Times
• [United Kingdom] Evidence and the persistence of mistaken ideas: the case of house prices – mainly macro