  What causes house prices to rise and fall? Economists identify household
access to credit as a crucial factor. "Loan-to-Value" and "Debt-to-GDP" ratios
are the standard measures for credit access. However, these measures fail to
explain the depth of the Dutch housing bust after the 2009 Financial Crisis.
This work is the first to model household lending capacity based on the
formulas that Dutch banks use in the mortgage application process. We compare
the ability of regression models to forecast housing prices when different
measures of credit access are utilised. We show that our measure of household
lending capacity is a forward-looking, highly predictive variable that
outperforms `Loan-to-Value' and debt ratios in forecasting the Dutch crisis.
Sharp declines in lending capacity foreshadow the market deceleration.
