ECB reports fall in housing loans

Escrito el 11 Mayo 2007 por Juan Toro en Financial Markets

The amount of housing loans in the Euro area decreased in the
first quarter of the year by 28 % according to a report released by the ECB
based on a survey of banks.

The recent hikes in interest rates by the ECB seem to be cooling the demand for
houses alleviating inflation pressures on the sector. Slower demand side
pressures are impinging on real state inflation. For Spain, a notorious case
of real state booming, housing price inflation dropped to 7.3 % in March.
Policy makers are expecting a soft landing in the housing sector. It is not
clear what a soft landing means, as we have not seen a wording of the term
by policymakers. Most probably they mean a rate of increase in real state
similar (or even slightly below) to those of a standard consumer price index
and a low delinquency rate when the mortgage burden increases (as rates
soar). That is, the real state boom is swallowed slowly by the economy
during a long period and we see housing price stagnant. The hard landing scenario
much disliked by policy makers, is an scenario where there are
sharp falls in real state prices, the value of the collateral in mortgage
loans decrease, there are high delinquency rates with buyer having
difficulties to honor mortgage payments, and the banks balance sheet

Someone should regret from the mistakes of the past. Interest rates have been sitting
at 2 percent from June 2003 to December 2005 when real state prices where already
increasing at two digit levels. Rates are now at 3.75 per cent and there is another move
to 4 percent coming in June. Two little, too late to avoid hard landing?


Joyce 17 Diciembre 2008 - 11:54

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.



styczen 5 Enero 2014 - 16:09

Recommeneded websites…

Here you’ll find some sites that we think you’ll appreciate, just click the links over…

Christopher Quinn 25 Mayo 2017 - 17:28

Managing finances is at the root of all major business decisions and the role of a financial manager is crucial to the success of any type of organization. A financial manager is responsible for providing financial guidance and support to clients and colleagues so they can make sound business decisions. Real Dissertation Help also hired a finance user for their writing company , after that they can easily manage their finance depart as it is the basic need for every firm. Finance is a field that deals with the study of investments. It includes the dynamics of assets and liabilities over time under conditions of different degrees. I really like to visit here, it contains so many useful information,which is quite useful and helpful. Thanks for that.

Dejar un Comentario


Utilizamos cookies propias y de terceros para mejorar nuestros servicios y mostrarle contenido relacionado con sus preferencias mediante el análisis de sus hábitos de navegación. Si continua navegando, consideramos que acepta su uso. Puede cambiar la configuración u obtener más información aquí. Aceptar