## Real Estate Sector and Financial Stability Risks in Chile: Chile

_Selected Issues Papers, February 25, 2025_

## Source details

**Canonical URL:** [Real Estate Sector and Financial Stability Risks in Chile: Chile](https://www.imf.org/en/publications/selected-issues-papers/issues/2025/02/25/real-estate-sector-and-financial-stability-risks-in-chile-chile-562673)

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## Bibliographic details
- Authors: Tatsushi Okuda
- Published: February 25, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229002462.018

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### Executive summary
- The Chilean real estate sector has recently undergone adjustments which have increased the risks for the financial sector, but the system remains overall resilient.
- In the baseline, the real estate market is expected to modestly recover.
- Several factors mitigate credit risk.
- The buffers in the financial sector currently appear broadly adequate to absorb stresses from high long-term interest rates and the tail risk of a real estate crisis.
- Supervisors should monitor these risks closely, keep advancing in closing data gaps, and continue to extend stress test models to comprehensively capture real estate-specific risk factors.

### Key findings and risks
- Recent adjustments in the real estate sector have elevated financial sector risks.
- Baseline outlook: modest recovery of the real estate market.
- Risk mitigation: unspecified "several factors" that mitigate credit risk are present.
- Financial buffers: currently appear broadly adequate to absorb:
  - stresses from high long-term interest rates, and
  - the tail risk of a real estate crisis.
- Remaining vulnerabilities: need for closer supervisory monitoring, improved data coverage, and enhanced stress test models to incorporate real estate-specific risk factors.

### Policy recommendations and supervisory actions
- Monitor real estate-related risks closely.
- Advance in closing data gaps pertaining to the real estate sector and financial exposures.
- Continue to extend and refine stress test models so they comprehensively capture real estate-specific risk factors.

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/02/25/real-estate-sector-and-financial-stability-risks-in-chile-chile-562673_