The functioning of housing sector is determined by a number of factors, among which particularly important is system for financing housing investments. Traditionally mortgage loan is one of the main instruments of housing finance. Empirical studies emphasize that the developed mortgage lending market has a positive effect on the housing conditions of households and also induces growth in the area of housing construction and housing resources. However, an excessive increase in the scale of mortgage lending can be a source of instability in the real estate market and the banking sector.

The aim of this article is to empirically analyse the course of credit cycles and housing price cycles in selected European economies, as well as the assessment of the degree of cycles interdependence and synchronisation.