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

Kenneth Kuttner and Ilhyock Shim

Journal of Financial Stability, 2016, vol. 26, issue C, 31-44

Abstract: This paper investigates the effectiveness of nine non-interest rate policies on house prices and housing credit using data from 57 economies and periods of up to three decades. We find that introductions or reductions in the maximum debt-service-to-income ratio, and increases in housing-related taxes, have significant negative effects on housing credit, with a typical tightening action lowering the real credit growth rate by 4–6 percentage points and by 3–4 percentage points, respectively, over the subsequent four quarters. Increases in housing-related taxes moderate house price growth, with a typical increase slowing real house price appreciation by 3–4 percentage points over the same horizon.

Keywords: House prices; Housing credit; Financial stability; Macroprudential policy (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (207)

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Related works:
Working Paper: Can non-interest rate policies stabilise housing markets? Evidence from a panel of 57 economies (2013)
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:eee:finsta:v:26:y:2016:i:c:p:31-44

DOI: 10.1016/j.jfs.2016.07.014

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