Sunega, Pet; Lux, Martin
December 2013
E + M Ekonomie a Management / E+M Economics & Management;2013, Vol. 2013 Issue 4, p55
Academic Journal
The impacts of economic crisis on the Czech housing market were, at least till now, relatively moderate. In comparison to other developed countries (e.g. Ireland, Spain, Greece, USA, Denmark, Hungary, Estonia, Latvia or Bulgaria) was the decrease in residential property prices only gradual and the default rate is lagging behind the average of the developed countries. The volatility in residential property prices could follow the accumulation of systemic risks of owner-occupied housing, especially the growing share of low-income households with mortgage debts among home-owners. The article therefore aims to answer following research questions. First, was there significant increase in the share of low-income households repaying their mortgages in the owner-occupied housing sector in the Czech Republic after 2005? Second, was there significant increase in 'innovative' mortgage products (e.g. interest-only mortgages, mortgages denominated in foreign currencies etc.) on the Czech mortgage market after 2005? Supplementary question was, whether balanced housing market, i.e. housing market with significant share of rental housing, could be one of the reasons of lower volatility in residential property prices, in comparison to housing market oriented mainly toward owner-occupied housing. The analysis showed that the hypothesis about sharply growing share of low-income households repaying mortgages in the owner-occupied housing sector in the Czech Republic after 2005 can be rejected. Also the share of 'innovative' mortgage products in the portfolios of Czech mortgage lenders seems to be rather negligible. Therefore we concluded that there is no evidence about significant accumulation of systemic risks on the Czech housing market. Moreover, the comparison of impacts of economic crisis in selected countries showed that balanced housing market could pose the best protection against negative impacts of economics crisis and against increased volatility in residential property prices.


Related Articles

  • At the Mercy of the Market. Markels, Alex // U.S. News & World Report;12/24/2007, Vol. 143 Issue 22, p49 

    The article reports on the declining state of the U.S. housing market that is turning home buyers into sellers to avoid foreclosure on their mortgages. Building companies are undercutting their recent customers by dropping home prices, often to cost. According to the real estate research firm...

  • Multivariate dependence of implied volatilities from equity options as measure of systemic risk. Jobst, Andreas A. // International Review of Financial Analysis;Jun2013, Vol. 28, p112 

    Abstract: This paper presents a methodology to examine the multivariate tail dependence of the implied volatility of equity options as an early warning indicator of systemic risk within the financial sector. Using non-parametric methods of estimating changes in the dependence structure in...

  • VARIANCE-OPTIMAL HEDGING FOR TARGET VOLATILITY OPTIONS. XINGCHUN WANG; YONGJIN WANG // Journal of Industrial & Management Optimization;Jan2014, Vol. 10 Issue 1, p207 

    In this paper, we consider a variance-optimal hedge for target volatility options, under exponential Lévy dynamics. Since the payoff of target volatility options is related with realized volatility of some underlying asset, which is path-dependent, it is difficult to price this instrument....

  • The Formation of a Single Legal Space as a Prerequisite for Overcoming Systemic Risk. Korableva, Olga N.; Kalimullina, Olga V. // Asian Social Science;Nov2014, Vol. 10 Issue 21, p256 

    This article examines the concept of systemic risk, its fundamental origins and the dangers of systemic risk in a given state in relation to other countries of the world. Methods for minimizing systemic risks in the contemporary world are looked at, with special attention given to the idea of...

  • TRENDS AND VOLATILITY: MEASURING THE HOUSING MARKET USING THE GARCH MODEL.  // Journal of the Academy of Business & Economics;2010, Vol. 10 Issue 5, p111 

    No abstract available.

  • 2007 still set to be a record year for UK mortgage lenders.  // MarketWatch: Financial Services;Nov2007, Vol. 6 Issue 11, p9 

    The article reports on the anticipated decline of the mortgage industry in Great Britain. It highlights the economic conditions in Northern Rock which causes a slowdown in housing market including the increase in interest rates on housing market, increasing consumer loans and lesser funding....

  • More Homeowners Underwater in 1Q.  // American Banker;5/7/2009, Vol. 174 Issue 87, p4 

    The article reports that over one-fifth of all homeowners in the U.S. owed more money on their houses than their houses were worth, as of the first quarter of 2009. These figures were provided by Zillow Inc., a firm specializing in real estate data. This trend was expected to continue, along...

  • Improving the Loss Mitigation Process. Garg, Ashish // Mortgage Servicing News;Aug2011, Vol. 15 Issue 8, p4 

    In this article, the author reflects on the need of mortgage loan servicers in the U.S. to become proactive in dealing with troubled borrowers to reduce delinquencies. The author emphasizes that loan servicers are still struggling with the volume of delinquent loans as a result of the crisis...

  • 'Fix planning system and build 1.5 million new homes by 2020'. Thomas, Paul // Mortgage Strategy (Online Edition);11/13/2013, p12 

    The article discusses a report from Policy Exchange called Taxing Issues which stated that around 1.5 million new homes have to be built in Great Britain between 2015 and 2020 to keep up with the new households being formed each year. The report claimed that policy makers must focus on fixing...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics