Rafael González-Val (p)

Zhenyu Su

Royal Decree-Law 6/2012 introduced a new Code of Good Practice for Spanish banks and financial institutions. Its aim was to protect low-income debtors. We thus examine the effects of this legal reform on banks’ lending behaviour, considering quarterly data from the 17 Spanish NUTS II regions from 2005 to 2020(Q1). By using panel data models with regional, year, and quarter fixed effects, linear and quadratic region-specific time trends, and other relevant control variables at the regional level (house prices, inflation, and unemployment rates), we find three significant effects of the law reform. Firstly, our results reveal that the reform significantly reduced the number (absolute and relative) of new mortgage loans. Put simply, the Code reduced the access to the credit market, and the reduction in funding impacted the housing market, reducing real estate sales. Secondly, the reduction of new mortgages was neither generalised nor random; it particularly affected the specific group of borrowers that the law seeks to protect. To benefit from the Code mortgage payments must exceed 50 percent of the net income received by all the members of the household; although individual data on mortgagors’ household income is not available, the average ratio between the monthly payment and the individual wage cost significantly decreased after the law reform, which means that low-income borrowers were progressively excluded as banks tended to lend to more solvent borrowers. Finally, average interest rate significantly decreased after the law reform. Our explanation thereof is a competition effect; specifically, financial institutions competed for ‘good’ borrowers—those who will not need to make use of the rules contained in the Code—thus lowering interest rates. The decrease in interest rates was a positive effect of the Code for all borrowers but, as high-risk low-income borrowers were progressively excluded, it was the middle and high-income borrowers who actually benefited from it. These results point to a duality in the effectiveness of the Code. Mortgage debtors that meet the legal requirements can make use of the Code to avoid foreclosure, but the law reform had an adverse effect for low-income borrowers in the future, reducing their access to the credit market. Consequently, our results cast a shadow over the economic and social consequences of the Code, and question whether it is the best instrument to face the current dramatic rise in interest rates and mortgage monthly payments, which are putting many mortgagors in an extreme situation.

Jiyoung Kim (p), Jumong Na

Rafael González-Val

Since the emergence of the fourth industrial revolution, our society has faced enormous changes in its industrial structure and population. It also affected the property industry, and the new notion of ‘proptech’ has emerged. ‘Proptech’, a compound word for property and technology, is a service provided by combining real estate industry sectors such as property brokerage, valuation, and real estate development with the fourth industrial revolution technologies such as artificial intelligence and big data. This study explored the utilization of proptech in urban regeneration projects through the case studies of 8 representative proptech companies which are related to the urban regeneration field. The 8 companies are ‘Engel Swing’, ’Holo builder’, ‘Spacewalk’, ‘Sidewalk Labs’, ‘Zigbang’, ‘Skyroom’, ‘Homes’, ‘Wework’. The results of the case studies, there are 3 ways to use proptech in the urban regeneration field. First, Proptech can contribute to collecting big data in urban space. Second, through Proptech, urban resources and space can be used efficiently. Lastly, Proptech can support the decision-making for urban regeneration. The difference from previous studies in this study is as follows. It deeply researched domestic and global proptech companies which are related to the urban regeneration field and it found the ways for the proptech to use in the urban regeneration part.

Philipp Brüger, Michael Steiner (p)

Jiyoung Kim

Vacancy is regarded as a widespread problem on housing markets. Policy makers try to combat it in several ways since it is considered detrimental to the affordability of housing. First an overview concerning the characteristics of vacancies and their measurement will be given and international approaches to combat them undertaken. Then the instrument of applying a tax will be examined, and how suitable it is for Austrian housing markets and what impact such a tax can have (with a special focus on the city of Graz). This paper also examines multiple ways of assessing vacancy rates and the results of assessments in Austrian cities. Since taxes with steering effects on housing markets are only possible on a federal level, this leads to the conclusion that the taxes on vacancies implemented on a regional and local level are set too low to have a significant impact on vacancy rates or housing prices.

Brice Barois (p), Leïly Hassaine-Bau (p)

Michael Steiner

In the first decade of the 21st century, institutional reforms were carried out in Mexico to promote the creation of financial entities in the stock market to raise funds for a growing real estate sector. Real estate investment trusts (FIBRA), by converting rental properties into stock market assets, are one of the main instruments. Inspired by the American Real Estate Investment Trust (REIT), these companies manage rental properties in the productive sector, such as offices, shopping centers, hotels, and industrial buildings, among others.
This article examines the participation of this instrument in the process of financialized urbanization by analyzing the real estate portfolios of FIBRAs and their diffusion in the urban system. The census and geo-referencing of more than 200 properties allows for an analysis of the structure of the tertiary sector (commercial and office) as a whole. The results show a process of specialization and diversification of trusts. On the one hand, the distribution of FIBRA properties in the municipal areas with the highest socio-economic levels reflects the role of this instrument in the consolidation of service-oriented enclaves. On the other hand, exploring the actors at the heart of the FIBRA market logics in the city of Monterrey, where the political, economic, and social elite constitute a homogeneous social group, makes it possible to analyze the strategies implemented by local private investors to guarantee their control of the entire real estate chain. Financialization then reinforces the process of 'corporate accumulation by dispossession' (Mbiba, 2017).

Zhenyu Su (p), Paloma Taltavull

Brice Barois

Using data collected from the Financial Times, this study employs the gravity model in trade to investigate the foreign direct investment (FDI) in the real estate sector of European cities from 2003 to 2022. The study focuses on the impact of housing prices and other economic indicators on FDI inflows and examines the effect of the COVID-19 pandemic on FDI flows in the European city real estate markets. The empirical findings from panel data analyses reveal that GDP and population have positive impacts on FDI flows. Furthermore, the analysis demonstrates that housing prices and the country's risk are significant determinants of FDI inflows. The study also examines the impact of the COVID-19 pandemic on FDI flows in the European city real estate markets. The analysis reveals a significant decline in FDI inflows in 2020 due to the pandemic's adverse impact on the global economy. However, the study also finds a partial recovery in FDI inflows in 2021 and 2022, indicating that the European city real estate markets remain attractive to foreign investors.
The study highlights the need for policies that promote a stable economic environment and an attractive investment climate in the post-COVID-19 era, as well as the importance of monitoring global economic trends and adapting policies accordingly.