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Macroeconomic policies and housing market in Taiwan

Shiou-Yen Chu

International Review of Economics & Finance, 2018, vol. 58, issue C, 404-421

Abstract: This paper develops a dynamic stochastic general equilibrium (DSGE) model that analyzes the transmission mechanisms of a real estate transfer tax and other macroeconomic policies on Taiwan's housing market. Our model matches the volatility of Taiwan's housing prices and housing transactions during 2011–2015, when the loan-to-value ratio was reduced and a transfer tax along with a property tax were collected. The calibration results indicate that imposing a residential property tax or raising interest rates effectively curbs speculative housing transactions and has prolonged effects on taming housing prices over time. Transfer tax imposition or a decrease in the loan-to-value ratio has short-lived effects on moderating housing markets.

Keywords: Collateral constraint; Property tax; Transfer tax; Speculation (search for similar items in EconPapers)
JEL-codes: E52 F41 R21 (search for similar items in EconPapers)
Date: 2018
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