Latin America: Vulnerabilities Under Construction?

Author/Editor:

Luis M. Cubeddu ; Camilo E Tovar Mora ; Evridiki Tsounta

Publication Date:

July 1, 2012

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 2012/193

Subject:

Credit Credit booms Financial institutions Housing Housing prices Money Mortgages National accounts Prices

English

Publication Date:

July 1, 2012

ISBN/ISSN:

9781475505429/1018-5941

Stock No:

WPIEA2012193

Pages:

27

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