Latin America: Vulnerabilities Under Construction?
28 Pages Posted: 1 Nov 2012
Date Written: July 2012
Abstract
This paper documents developments in mortgage credit and the housing sector in Latin America over the past decade, and compares them with those of other emerging economies. In particular, it examines the real estate and mortgage markets to assess whether (i) growth in mortgage credit is excessive compared to long-term trends; (ii) trends in house prices reflect changes in economic fundamentals; and (iii) the extent to which household and banking sector vulnerabilities could lead to potential fragilities. Although data limitations hamper a rigorous analysis of trends, our analysis suggests that while there are no imminent misalignments in the real estate and mortgage sectors, they could emerge if current trends persist. Strengthening supervision and addressing data gaps is thus critical to ensure adequate monitoring of risks and vulnerabilities in these sectors.
Keywords: Mortgage, Credit, Real Estate, Housing Prices, Data Gaps, Banking Sector, Credit Expansion, Emerging Markets, Household Credit, Latin America, Real Estate Prices
JEL Classification: E44, G10, G20, L85
Suggested Citation: Suggested Citation
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