This paper reviews a recent data on property markets and real estate-related bank loans in the euro area, looking at prices, mortgages, credit quality measures and some indicators of the costs faced by borrowers. It then takes a closer look at certain origination and monitoring practices adopted by significant institutions, as recently analysed by the ECB, which apparently show some room for improvement. Finally, it addresses property-related exposures held by non-bank financial institutions, with a focus on the main vulnerabilities of real estate investment funds. This document was provided by the Economic Governance and EMU Scrutiny Unit at the request of the ECON Committee.
Assessing real estate risks and vulnerabilities - Hidden cracks in the financial system?
Andrea Resti
2025
Abstract
This paper reviews a recent data on property markets and real estate-related bank loans in the euro area, looking at prices, mortgages, credit quality measures and some indicators of the costs faced by borrowers. It then takes a closer look at certain origination and monitoring practices adopted by significant institutions, as recently analysed by the ECB, which apparently show some room for improvement. Finally, it addresses property-related exposures held by non-bank financial institutions, with a focus on the main vulnerabilities of real estate investment funds. This document was provided by the Economic Governance and EMU Scrutiny Unit at the request of the ECON Committee.
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