Recommendation on medium-term vulnerabilities in the residential real estate sector in Germany

The European Systemic Risk Board recommends that German authorities impose a legally binding or non-legally binding limit on the loan-to-value ratio to mitigate vulnerabilities in the residential real estate sector. It further advises activating capital-based measures, such as the countercyclical capital buffer or sectoral systemic risk buffer, to enhance the resilience of credit institutions. The recommendation requires amending the legal framework to include borrower-based measures like debt-to-income and debt service-to-income limits, with compliance reports due by 30 June 2023 and 30 June 2025.

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EUR-Lex - 32022Y0317(01) - EN

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Lineage: In force

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Source: European Systemic Risk Board — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works