Whither Peripheral Financialisation? Housing Finance in Croatia since the Global Financial Crisis

Abstract

This article analyses recent developments in Croatian housing finance to update the established account of housing finance and peripheral financialisation in Eastern Europe that is based on the boom-bust cycle of the 2000s and early-to-mid 2010s. During the bust stage of that cycle, changes in regulation and in the behaviour of debtors and creditors resulted in deleveraging and a shift away from the risky and exploitative lending practices characteristic of peripheral housing finance. However, new increases in household debt and housing prices since 2016–17, coupled with the COVID-19 pandemic, seem to have reversed these trends. While a boom-bust cycle of similar scope and modality to the first one is unlikely to be repeated, peripheral forms of housing finance have persisted to some degree.