Front Matter Page
Monetary and Exchange Affairs Department
Authorized for distribution by Alfredo M. Leone
Contents
I. Introduction
II. The Functioning of Real Estate Markets and the Role of Banks
A. Main Determinants of Real Estate Prices
B. Real Estate Cycles and Bubbles
C. Risks of Overexposure
III. Empirical Evidence
A. Data Issues
B. Financial Distress Preceded by a Collapse in Real Estate Prices
C. Country Experiences
D. Real Estate Cycles in an Environment of Sound Banking Systems
E. A Probit-Logit Model for Financial Sector Distress
IV. Concluding Remarks
Bibliography
Text tables
1. Timing of Banking Sector Distress
2. Length and Magnitude of Real Estate Price Falls
3. Estimation Results Using a Probit Model
4. Estimation Results Using a Logit Model
5. Goodness of fit of the Estimations Based on the Probit and Logit Model
Figures
1. Residential Property Prices in 11 Selected Cases
2. Commercial Property Prices in 7 Selected Cases
3. Average Real Estate Prices and Banking Sector Distress
4. Real Estate Stock Prices and Banking Sector Distress
5. Property Prices and Real Credit Growth—Finland and Sweden
6. Property Prices and Real Credit Growth—Japan
7. Property Prices and Real Credit Growth—Thailand and Malaysia
8. Exposure to Real Estate and Construction—Thailand and Malaysia
9. Property Prices and Real Credit Growth—Mexico
10. Property Prices and Real Credit Growth—Spain, Canada, Ireland, and the Netherlands
11. Property Prices and Real Credit Growth—Singapore and Hong Kong SAR
12. Exposure to Real Estate and Construction—Singapore and Hong Kong SAR