The European Systemic Risk Board (ESRB) has published five warnings and two recommendations on medium-term residential real estate vulnerabilities. It has also published an assessment of compliance with recommendations issued in 2019. Warnings were sent to the competent ministers of five countries with newly identified vulnerabilities that have not been addressed sufficiently: Bulgaria, Croatia, Hungary, Liechtenstein and Slovakia. Recommendations were sent to the competent ministers of two countries, Austria and Germany, which had already received ESRB warnings in 2016 and 2019, respectively.
The assessment covered all EU Member States, Iceland, Liechtenstein and Norway . It analysed the main trends in various real estate indicators as well as the macroprudential policy actions that countries have taken to mitigate the financial stability risks identified. The outcome of this analysis shows that financial stability risks related to residential real estate have continued to increase in several countries in the context of macroeconomic risks related to the coronavirus (COVID-19) pandemic and continued strong dynamics in housing markets, housing credit and household indebtedness.