Regulatory Alerts2021-12-02
Added · Updated
Warning of the European Systemic Risk Board on medium-term vulnerabilities in the residential real estate sector of Bulgaria
The European Systemic Risk Board identifies medium-term systemic risks in Bulgaria's residential real estate sector, citing accelerated real house price growth, significant increases in household mortgage loans, and the absence of borrower-based measures. The Board notes that while the banking sector maintains high capital buffers and a low non-performing loan ratio, the prevalence of variable-rate loans and a potential credit-price spiral pose medium-term threats. It recommends the introduction of borrower-based measures to act pre-emptively against the build-up of risks related to the residential real estate sector.