Housing affordability and methodological principles: An application

Housing affordability has become a key theme of housing policy against the background of the subprime mortgage crisis and the need to reduce fiscal subsidies. The aim of this research was to develop an approach of banking credit participation during the realization of method able to assess housing affordability. The method was developed in order to deal with the real purchasing capacity of households, taking into account existing bank structures and the procurement of housing loans, as well as to assess the potential demand for mortgage lending as a promising area of banking. Assessment can be made by considering the conditions of housing loans from the largest banks and statistical information on the income of the population, together with information from real estate agencies about the current level of prices in the housing market. The approach proposed could be useful for the authorities, when determining the content of housing policy, as it provides an opportunity to identify more effective ways of solving the housing problem through a comprehensive assessment of housing needs and opportunities for the banking system to engage in lending.