House Prices, Mortgage Rate, and Policy: Megadata Analysis in Taipei

Chien-Ming Yu and Pei-Fen Chen
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Chien-Ming Yu: Department of International Business Studies, National Chi-Nan University, No.470 Daxue Rd., Puli Township, Nantou County 54561, Taiwan

Sustainability, 2018, vol. 10, issue 4, 1-23

Abstract: There are intensive concerns about the causes of rising housing prices in Taipei. The aims of this study are twofold. The first addresses the issue of whether the low-interest-rate policy is adversely driving housing prices in the metropolitan area of Taipei. The second is to investigate if two important housing policies, luxury tax and actual price registration, help to depress the rising residential house prices. With the mega tick data of Taipei city for more than 80,000 residential house transaction records, we examined the factors influencing the actual house prices spanning the period from June 2008 through May 2014. We applied the least squares regression and the quantile regression in the model estimations for housing valuation. In addition, the megadata set is organized in time series and cross-section structures for five subdistricts and the whole Taipei city as well. The empirical results show that low mortgage rates have been the most significant factor for soaring housing prices in Taipei for the past decade. We estimate that a 1% increase in mortgage rates reduces housing prices from 5% to 17%. The actual price registration policy contributes to the decrease in housing prices by 4% to 29%. Housing policy implications are made based on our empirical findings.

Keywords: house policy; macroeconomic factor; luxury tax; actual price registration; mortgage rate; tick data (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

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