ORIGINAL ARTICLE The real estate and credit bubble: evidence from Spain

© The Author(s) 2014. This article is published with open access at SpringerLink.com Abstract We analyze the determinants of real estate and credit bubbles using a unique borrower-lender matched dataset on mortgage loans in Spain. The dataset contain real estate credit and price conditions (loan principal and spread, and the appraisal and market price) at the mortgage level, matched with borrower characteristics (such as income, labor status and contract) and the lender identity, over the last credit boom and bust. We find that lending standards are softer in the boom than in the bust. Moreover, despite some adjustment in lending conditions in the good times depending on bor-We wish to thank the suggestions of two referees and the editor in charge of the paper (Nezih Guner). Montalvo would like to acknowledge the financial support of Project ECO2011-25272 (Ministerio de Ciencia e Innovacion) and the Fellowship ICREA-Academia for Excellence in Research funded by the Generalitat de Catalunya. J. García Villar would like to acknowledge the financial support of Project ECO2012-39553-C04-01 (Ministerio de Economía y Competitividad). The usual disclaimer applies