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Residential real estate variables

Imbalances in residential real estate markets (RRE) have played a significant role in many of the financial crises experienced in the past. The potentially important role of RRE markets in the build-up of financial vulnerabilities also helps explain why several macroprudential instruments target specifically the loans secured by RRE, which include instruments that target banks (e.g. sectoral capital requirements) and instruments that target borrowers (e.g. loan-to-value (LTV), loan-to-income (LTI) and debt-service-to-income (DSTI) caps). The MPDB therefore includes times series on variables that have been identified as potential leading indicators for RRE crises and/or that are the basis for the above-mentioned macroprudential instruments (e.g. information on LTV ratios at origination, DSTI levels, and regulatory risk weights applied to the residential real estate portfolio). Some of these areas are however still characterised by important gaps in the availability of comprehensive and comparable data for various countries.
Against this background, the MPDB has identified a broad set of indicators for the RRE domain.

  • A first set of indicators looks at the domestic household sector’s balance sheet and its mortgage liabilities, whereby some relevant variables are omitted because they are included in other domains (e.g. total household sector debt and household sector disposable income).
  • The second set of indicators covers time series that provide information on mortgage loans’ key features, such as data on the interest rate cost of mortgage loans and their interest rate variability. In the future, these should hopefully be complemented with comprehensive and comparable data on mortgage loan maturities and LTV, DSTI or LTI ratios.
  • A third group of indicators focuses on time series providing information on house prices and house price valuation.
  • The fourth group of indicators relates to time series that provide information on primary and secondary market transactions, as well as indicators on the supply side of the residential real estate market.

The list of indicators, together with the underlying SDW codes and indicators calculations, can be accessed via the following catalogue:

Residential real estate variables catalogue