The surge in net lending by banks to commercial property firms may in part reflect borrowers being forced to refinance loans on buildings they have been unable to sell. But in contrast to the GFC, when net lending also initially surged as loans weren’t paid back, banks today are happy to oblige, with a substantial balance planning on increasing the availability of credit further in Q4. And with capital values rising, loan-to-value ratios low and interest rates set to fall back, we think that banks will eventually get paid back.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services