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.
-to-income were above neighboring countries.
Georgetown HousingIndex 1/
(In percent change, Y/Y)
Source: Bureau of Statistics
1/ Derived from Urban Consumer Price Index (Georgetown); includes rent, fuel and power.
Real Estate Price to Income Ratio, mid-2019
Real Estate Price to Rent Ratio, mid-2019
6. Commercial banks’ mortgage lending is increasing, and household exposure to mortgage debt appears high in Georgetown . In line with the recovery in housing prices since 2015, commercial banks’ private dwellings
with 62 percent for the general market index. From their peak, prices have declined by about 20 percent for the general index and about 13 percent for the housingindex. In 1996/97, price-earnings ratios increased from 6.9 to about 14 for the general index, but from 9 to about 25 for the housingindex. Although, it is premature to infer overheating in the real estate market on the basis of these Figures (in part because the housingindex comprises five companies of which two account for the bulk of market capitalization), they nevertheless bear close monitoring
subcomponent of “recreational, educational, and cultural articles” has been left out. As to the remaining components, a sufficiently close match has been achieved, although some differences remain: (1) the Shenzhen food index includes alcoholic drinks and tobacco; (2) the Shenzhen durable goods index excludes durable goods for recreational use; (3) the Shenzhen transportation index includes communication (4) the Shenzhen housingindex includes gas, water, and electric; and (5) the services index has been left out for 2001 as the Shenzhen definition was changed that year
International Monetary Fund. Monetary and Capital Markets Department
and exit the business.
25 The macroeconomic series are available at annual frequency, which limits the number of observations and significantly reduces the modeling flexibility, requiring an extremely parsimonious specification.
26 The Florida housingindex appears more closely associated with real GDP growth in The Bahamas than the broader U.S. housingindex, possibly because it reflects more fully prices of vacation properties and similar climatic conditions.
27 The expected inflation variable proved insignificant in the inflation equation. The
Juliana Dutra Araujo, Manasa Patnam, Ms. Adina Popescu, Mr. Fabian Valencia, and Weijia Yao
structural measures (e.g., limits on exposures between financial institutions).
i_housingIndex measure constructed with housing tools only.
i_non_housingIndex measure constructed without housing tools (broad_based, liquidity, other).
Index measure constructed with both housing and non-housing tools.
* some papers also study FX targeted measures of this macroprudential tool (suffix: _FX), we classify these measures in the same group as the tools listed in the table
† some papers also study household or housing