Selected Issues Papers

This Selected Issues Paper (SIP) analyzes recent developments in the real estate market in Bosnia and Herzegovina, focusing on housing price dynamics, financial stability implications, and policy responses. Housing prices in Bosnia and Herzegovina have increased sharply in recent years, mirroring trends across the region. Despite significant increases in the House Price Index and strong private credit growth, systemic risks remain contained due to the relatively low share of mortgages in banks’ portfolios and modest household indebtedness. The SIP highlights that systematic monitoring of housing market and credit indicators is necessary to detect vulnerabilities early and ensure a timely and effective policy response to potential real estate market shocks.