Credit cycles and real estate cycles

Gantenbein, Pascal and Zaby, Simon. (2014) Credit cycles and real estate cycles. In: Proceedings of the second international conference on credit analysis and risk management. Newcastle Upon Tyne, pp. 64-72.

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Official URL: http://edoc.unibas.ch/dok/A6329003

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We analyze the relationship between credit cycles and real estate cycles. Until recently, there has been quite little research on this topic. However, the subprime crisis of 2007-2009 has fostered an academic literature dealing with both real estate valuation driving credit markets and vice versa. Our categorization of the respective literature shows that expected collateral values and probabilities of real estate crises may be distorted, this way leading to more lending and hence to a higher demand for real estate and higher property prices. There is evidence for a mutual relationship of these two markets rather than for one market leading the other. However, turning points and structural breaks tend to occur when valuation divergences become increasingly apparent to investors and lenders.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Finanzmanagement (Gantenbein)
UniBasel Contributors:Gantenbein, Pascal and Zaby, Simon
Item Type:Book Section
Book Section Subtype:Further Contribution in a Book
Publisher:Cambridge Scholars Publishing
Note:Publication type according to Uni Basel Research Database: Book item
Last Modified:06 Feb 2015 09:58
Deposited On:06 Feb 2015 09:58

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