Can non-interest rate policies stabilise housing markets? Evidence from a panel of 57 economies

Kenneth Kuttner and Ilhyock Shim

No 433, BIS Working Papers from Bank for International Settlements

Abstract: Using data from 57 countries spanning more than three decades, this paper investigates the effectiveness of nine non-interest rate policy tools, including macroprudential measures, in stabilising house prices and housing credit. In conventional panel regressions, housing credit growth is significantly affected by changes in the maximum debt-service-to-income (DSTI) ratio, the maximum loan-to-value ratio, limits on exposure to the housing sector and housing-related taxes. But only the DSTI ratio limit has a significant effect on housing credit growth when we use mean group and panel event study methods. Among the policies considered, a change in housing-related taxes is the only policy tool with a discernible impact on house price appreciation.

Keywords: House prices; housing credit; financial stability; macroprudential policy (search for similar items in EconPapers)
Pages: 43 pages
Date: 2013-11
New Economics Papers: this item is included in nep-mac and nep-ure
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Citations: View citations in EconPapers (137)

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Related works:
Journal Article: Can non-interest rate policies stabilize housing markets? Evidence from a panel of 57 economies (2016)
Working Paper: Can Non-Interest Rate Policies Stabilize Housing Markets? Evidence from a Panel of 57 Economies (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:433

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