October 31, 2016

The recommendation was adopted by the ESRB on 31 October. Earlier work by the ESRB identified the significance of developments in the real estate sector for financial stability and the considerable data gaps that continue to exist in this area. With this recommendation, which covers both the residential and commercial real estate sectors, the ESRB aims to establish a more harmonized framework for monitoring developments in real estate markets in the European Union. The recommendation therefore provides a common set of indicators that national macro-prudential authorities require to monitor risks originating from the real estate sector along with working definitions of these indicators. The ESRB monitors compliance with its recommendations via an “act or explain” mechanism. The deadline for implementing the recommendation on closing real estate data gaps is end-2020. As follow-up work to the recommendation, the ESRB is of the view that a regular data collection on these indicators should take place at EU level and that the European Central Bank is well placed to play a leading role in this.

Link to Full Report: 

http://hofinet.org/upload_docs/ESRB_2016_14.en%20real%20estate%20sector%20standardized%20data.pdf