{
  "title": "Assessing House Prices with Prudential and Valuation Measures",
  "publication": "IMF Working Papers, March 18, 2019",
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  "summary": "In this paper we provide tools for assessing the house prices and housing valuation. We develop two approaches: (i) borrowing capacity approach, and (ii) intrinsic value approach. The borrowing capacity of households, together with their down payment, implies how much housing they can attain.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Purpose: Provide tools for assessing house prices and housing valuation using widely available data and without complex econometric models.\n- Two main approaches developed:\n  - Borrowing capacity approach: The borrowing capacity of households, together with their down payment, implies how much housing they can attain.\n  - Intrinsic value approach: Property value is viewed as a discounted present value of adjusted net rental income.\n- Intended users: Households, financial markets, and macroprudential authorities.\n- Empirical illustration: Analysis of housing prices in the Czech Republic to assess the degree of market over- and undervaluation.\n- Date: March 18, 2019"
    },
    {
      "heading": "Methodologies",
      "content": "- Borrowing capacity approach\n  - Uses household borrowing capacity and down payment data to infer attainable housing amounts.\n- Intrinsic value approach\n  - Values property as the discounted present value of adjusted net rental income.\n- Data and modeling stance\n  - No complex econometric model required.\n  - Relies only on widely available data.\n- Purpose of indicators\n  - Guide understanding of house price developments for households, financial markets, and macroprudential authorities."
    },
    {
      "heading": "Key Findings and Analytical Claims",
      "content": "- The paper develops indicators that can:\n  - Inform assessments of house price valuation (overvaluation and undervaluation).\n  - Be applied without sophisticated econometric techniques.\n- Application: Concepts are applied to the Czech Republic housing market to illustrate measurement and assessment of market valuation."
    },
    {
      "heading": "Policy Implications and Use Cases",
      "content": "- Indicators can guide:\n  - Household decisions regarding affordability and down payments.\n  - Financial market assessments of housing-related risk.\n  - Macroprudential authorities in evaluating housing market vulnerabilities and policy calibration.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2019/03/18/assessing-house-prices-with-prudential-and-valuation-measures-46664"
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    "Authors: Michal Andrle, Miroslav Plašil",
    "Published: March 18, 2019",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781498302814.001",
    "Purpose: Provide tools for assessing house prices and housing valuation using widely available data and without complex econometric models.",
    "Two main approaches developed:",
    "Intended users: Households, financial markets, and macroprudential authorities.",
    "Empirical illustration: Analysis of housing prices in the Czech Republic to assess the degree of market over- and undervaluation.",
    "Date: March 18, 2019",
    "Borrowing capacity approach",
    "Intrinsic value approach",
    "Data and modeling stance",
    "Purpose of indicators",
    "The paper develops indicators that can:",
    "Application: Concepts are applied to the Czech Republic housing market to illustrate measurement and assessment of market valuation.",
    "Indicators can guide:",
    "**Working Paper**"
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