Blogs.imf.org [2022]

Last Update: April 3, 2022

Commercial Real Estate at a Crossroads

The commercial real estate sector has the potential to affect broader financial stability: the sector is large; its price movements tend to reflect the broader macro-financial picture; and, it relies heavily on debt funding. In many economies, commercial real estate loans constitute a significant part of banks’ lending portfolios.

Actived: 2 days ago

URL: https://blogs.imf.org/2021/03/29/commercial-real-estate-at-a-crossroads/

Housing Prices Continue to Soar in Many Countries Around

(Just Now) Low Real Interest Rates Support Asset Prices, But Risks Are Rising. January 27, 2022. Emerging-Market Central Bank Asset Purchases Can Be Effective but Carry Risks. January 5, 2022. Chart of the Week The World’s Top Recipients of …

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Global House Price Index

(1 days ago) By Hites Ahir and Prakash Loungani. Versions in: عربي (Arabic), 中文 (Chinese), Français (French), 日本語 (Japanese), Русский (Russian), and Español (Spanish) During 2007-08, house prices in several countries collapsed, marking the onset of a global financial crisis. The IMF’s Global House Price Index, a simple average of real house prices for 57 countries, is …

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housing market – Page 2 – IMF Blog

(8 days ago) But real-estate boom episodes have often ended in busts with dire economic consequences, especially when the boom was financed through fast credit growth. Several countries have seen these boom-bust patterns over the last decade, particularly in some of the hardest hit countries during the global financial crises, such as Ireland, Spain, and

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For Home Prices in London, Check the Tokyo Listings

(4 days ago) Institutional investors, private equity firms, and Real Estate Investment Trusts have been increasingly active in major cities such as Amsterdam, Sydney, and Vancouver as they seek out higher returns. Wealthy individuals have also snapped up properties in major financial centers in search of safe places to invest their money (and perhaps to

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Whack-A-Mole in China’s Bubbly Housing Market

(8 days ago) All of these forces have led the real estate market in some of China’s largest cities to look decidedly bubbly. The government has confronted these forces with a menu of measures . Such measures include limits on speculation and restrictions on purchases by non-owner occupiers, and the financial system is being protected through curbs on

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A Disrupted Global Recovery – IMF Blog

(1 days ago) China’s downgrade reflects continued retrenchment of the real estate sector and a weaker-than-expected recovery in private consumption. Supply disruptions have led to markdowns for other countries too, such as Germany. We expect global growth to slow to 3.8 percent in 2023. This is 0.2 percentage point higher than in the October 2021 WEO and

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The U.S. Housing Market’s Road to Recovery – IMF Blog

(4 days ago) Lower returns on financial assets, such as long-term bonds, have also made real estate investment more attractive to investors. Second, mortgage finance policies (such as the Home Affordable Refinance Program (HARP) and the Home Affordable Modification Program (HAMP)) have provided a further boost to refinancing and helped reduce the weight of

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Chart of the Week: Norway’s Home-Price Boom

(5 days ago) Prices in Oslo are perhaps the most visible symptom of a real estate boom across the oil-rich, Nordic nation of 5.2 million people. Nationwide, the cost of a home relative to income has almost doubled since the mid-1990s. Strong demand for housing in Norway has been driven by growing incomes, the rising number of households relative to housing

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U.S. Housing and Labor Pains—Central America and the

(6 days ago) This has translated into a loss of over $6.5 trillion in real estate wealth since end-2006. And with the hit to wealth, and an uncertain outlook for house prices, consumers—in the past, the main engine of U.S. growth—have slowed spending considerably.

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Economic Indicators Signal Diminished Growth Momentum at

(4 days ago) In China, tighter mobility restrictions have resulted in weaker-than-expected retail sales, while a decline in real estate investment and tighter travel restrictions have also represented headwinds. Meanwhile, inflation has been higher than expected in many economies, while financial markets remain volatile and geopolitical tensions have increased.

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Getting the Diagnosis Right: Avoiding a Housing Price

(8 days ago) Mortgages are cheaper which has encouraged many to borrow to invest in real estate. Indeed, mortgage lending has expanded by almost 15 percent over the past year. But other factors are also at work. There is a strong demand for property from both Mainland Chinese investors and from high net worth professionals that are moving to work in Hong

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Fabio M. Natalucci

(9 days ago) Fabio M. Natalucci IMFBlog 2021-10-04T09:01:21-04:00. Fabio M. Natalucci is a Deputy Director of the Monetary and Capital Markets Department. He is responsible for the Global Financial Stability Report that gives the IMF’s assessment of global financial stability risks. Prior to joining the IMF, Fabio was a Senior Associate Director in the

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Countries in the IMF Financial Stability Spotlight in 2022

(2 days ago) The FSAP will assess the financial stability implications of structural vulnerabilities associated with low banking profitability and price misalignments in the real estate sector. It will analyze the risks of adverse economic shocks such as a global resurgence of COVID-19, inflationary pressures, and implications of any shift in market

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Global Financial Stability Improves; Getting

(8 days ago) On the other hand, firms in sectors accounting for almost half of U.S. investment—namely energy, utilities, and real estate—are already highly levered. This means that expanding investment, even with tax relief, could increase already elevated debt levels.

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Assessing Climate-Change Risk by Stress Testing for

(6 days ago) Stress tests capture how an initial financial shock, such as a sudden decline in economic growth or a plunge in real estate prices, can be amplified throughout the financial system. This includes linkages between financial institutions and the day-to-day functioning of the economy, between solvency and liquidity problems, between governments

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Old Dilemmas, New Challenges: Monetary Policy and Capital

(1 days ago) For example, the easing of credit conditions would raise prices of assets, chiefly real estate prices. This would divert resources into these assets, rather than benefitting domestic manufacturing. With the availability of overseas-funded bank loans, the increase in real estate prices could become self-reinforcing, to the detriment of other

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Managing House Price Booms in Emerging Markets

(Just Now) Sectoral capital requirements, which force lenders to hold extra capital against loans to a specific sector, such as real estate. Provisioning requirements, which force lenders to build reserves against an eventual nonpayment of loans to particular sectors.

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Transitions to Financial Stability: A Bumpy Ride – IMF Blog

(1 days ago) One example is mortgage real estate investment trusts. Like the structured investment vehicles and the conduits before the crisis, mortgage real estate investment trusts are highly leveraged and susceptible to funding runs. They could be forced to sell their asset holdings quickly, causing disruption in the mortgage-backed securities market

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The Emerging Bright Spot in Europe – IMF Blog

(4 days ago) During the boom years, real estate, construction, and finance were very profitable—much more so than manufacturing. But profits were artificially inflated by asset price bubbles and the under-pricing of risk. Now that profits …

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Reigniting Growth in Emerging Europe – IMF Blog

(Just Now) Capital inflows were large, but to a great extent went to the “non-tradable” sector—in particular, real estate, construction, and banking. Capital flows boosted domestic demand rather than supply—leading to a surge in imports, current account deficits that widened to unprecedented levels, and overheating economies.

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household debt – IMF Blog

(1 days ago) But real-estate boom episodes have often ended in busts with dire economic consequences, especially when the boom was financed through fast credit growth. Several countries have seen these boom-bust patterns over the last decade, particularly in some of the hardest hit countries during the global financial crises, such as Ireland, Spain, and

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Emerging Europe—Lessons from the Boom-Bust Cycle

(2 days ago) Now that profits in the nontradable sector (finance, real estate, construction) have shrunk, investments will seek more promising venues. More balanced macroeconomic policies and wage restraint can also help maintain balanced growth by preventing the overheating that pulls resources from the tradable to the nontradable sector.

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Reducing Risks in Asia with Macroprudential Policies – IMF

(6 days ago) Booming real estate markets, rapid credit growth and—at least before the Fed’s tapering announcement last year—sustained capital inflows have raised financial stability challenges across many parts of Asia. To address them, policymakers have increasingly made use of macroprudential policies that address the stability of the financial

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Behind the News in Greece and China, Moderate

(5 days ago) But, for the moment, the slowdown in growth is primarily led by a slowdown in real estate investment, a development we see as basically desirable. In constructing forecasts for China, our assumption continues to be that the Chinese authorities will indeed allow a moderate slowdown of growth, while also using monetary and fiscal policies if

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Today’s Information is Ammunition for Tomorrow – IMF Blog

(3 days ago) The absence of systematic housing price series for the majority of countries in the region hampers risk monitoring and assessment and, by extension, timely decision-making to avoid excesses related to the real estate sector.

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Europe: Toward A More Perfect Union

(8 days ago) But as we now know, the optimism about the use of these funds turned out to be overdone. Domestic productivity in most of the recipient countries did not improve—credit was used to finance current consumption and investment in real estate rather than productive capital. In fact, there has been little absolute real convergence in the euro area.

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Latin America: Vulnerabilities Under Construction

(2 days ago) A proper assessment of the situation is hindered by the limited and weak information available for the real estate sector in Latin America. Patchy information House price data are only available for some countries—namely, Brazil, Chile, Colombia, Mexico , Peru, and Uruguay—and even when available, time series are usually short, with

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To Safeguard Global Financial Stability, Boost the

(4 days ago) To Safeguard Global Financial Stability, Boost the Resilience of Investment Funds. IMFBlog 2021-11-01T16:06:49-04:00. September 17, 2021. |. By Tobias Adrian, Antonio Garcia Pascual, Ranjit Singh, and Jay Surti. Investment funds were hit hard by the pandemic; their response amplified its adverse impact on financial markets and capital flows.

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regional economic outlook – Page 2 – IMF Blog

(9 days ago) Booming real estate markets, rapid credit growth and—at least before the Fed’s tapering announcement last year—sustained capital inflows have raised financial stability challenges across many parts of Asia. To address them, policymakers have increasingly made use of macroprudential policies that address the stability of the financial

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Did Islamic Banks in the Gulf Do Better Than

(9 days ago) But, in 2009, data for the first half of the year indicate somewhat larger declines in profitability for Islamic banks, revealing the second-round effect of the crisis on the real economy, especially real estate. Going forward, Islamic banks overall are better poised to withstand additional stress, according to the IMF analysis. Portfolio risk

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Countries in the IMF Financial Spotlight in 2017

(2 days ago) Since the 2012 assessment, the profitability of financial institutions’ domestic operations has weakened. This has prompted large banks and insurers to expand overseas in a search for higher yields, and smaller banks to increase their exposure to real estate and small and medium-sized enterprises.

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Navigating Through Global Cross Currents: Latest Outlook

(5 days ago) Real GDP growth in 2017 is expected to turn positive and reach 0.2 percent. However, elevated unemployment and high private sector debt will continue to be a drag on demand. To spur growth, the government has announced measures to help highly indebted companies and reforms to reduce red tape and the cost of doing business.

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Fiscal Rules: Make them Easy to Love and Hard

(7 days ago) On September 7, 2000 the clock will be shut off because the debt, after reaching a high of $5.78 trillion in 1999 started to decline to $5.68 trillion on September 1, 2000. The clock was started in 1989 by the late real estate developer Seymour Durst to raise public aeareness of the national debt.

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China Must Quickly Tackle its Corporate Debt

(7 days ago) This corporate credit boom reflected the government efforts to stimulate the economy in the wake of the global financial crisis, largely through lending for infrastructure and real estate. The outcome: overbuilding and a severe overhang of unsold properties, especially in lower-tier cities, along with excess capacity in related industries such

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