Selected Issues Papers

Real Estate Sector and Financial Stability Risks in Chile: Chile

By Tatsushi Okuda

February 25, 2025

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Format: Chicago

Tatsushi Okuda. "Real Estate Sector and Financial Stability Risks in Chile: Chile", Selected Issues Papers 2025, 011 (2025), accessed April 16, 2025, https://doi.org/10.5089/9798229002462.018

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Summary

The Chilean real estate sector has recently undergone adjustments which have increased the risks for the financial sector, but the system remains overall resilient. In the baseline, the real estate market is expected to modestly recover, and several factors mitigate credit risk. The buffers in the financial sector currently appear broadly adequate to absorb stresses from high long-term interest rates and the tail risk of a real estate crisis. Nevertheless, supervisors should monitor these risks closely, keep advancing in closing data gaps, and continue to extend stress test models to comprehensively capture real estate-specific risk factors.

Subject: Financial institutions, Financial sector policy and analysis, Financial sector stability, Financial services, Loans, Long term interest rates, Mortgages

Keywords: Financial sector stability, Global, I. housing wealth effect, Loans, Long term interest rates, Mortgages, Real estate, Real estate crisis, Real estate sector, Risk factors, Stress testing

Publication Details

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