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Performing an interest rate sensitivity analysis5, we find that households, in highly indebted countries and relatively lower income levels (such as Cyprus and Portugal) could lose up to 3,5% of their net monthly income with a 1% interest rate increase. Therefore, in calibrating macroprudential tools, authorities should not use static assumptions, but should account for probable future interest rate or income changes. There are of course other exogenous factors that affect the housing market, such as Fiscal Policy. For example, tax incentives for house purchases that are not income based could be a driver for housing price pressures. However, an efficient social policy that targets inequalities and house deprivation, could limit risk taking by financial institutions and support financial stability during downturns. To sum up, the euro area residential real estate market is characterised by heterogeneity. Vulnerabilities in the real estate market are not necessarily cyclical in nature but structural factors also play a role. A single policy or measure cannot be enough to tackle the materialisation of risks from the residential market, although macroprudential authorities, as the first line of defence, have a significant toolbox in their hands, that can help in containing these risks. 1 "Macroprudential analysis of residential real estate markets", Duca et al., ECB  Macroprudential Bulletin, 2019. 2 Other explanatory variables included are the year-on-year growth on GDP and the 3-  month Euribor rate, as well as past observations in the growth rates of housing loans and house prices.