 Policy-Driven Boom and Bust in the Housing Market: Evidence from MongoliaGan-Ochir Doojav () and Davaasukh Damdinjav Asian Development Review (ADR), 2021, vol. 38, issue 02, 279-317 Abstract: This paper examines the effects of a mortgage interest rate subsidy on booms and busts in the housing market by analyzing the Housing Mortgage program in Mongolia. We find that the most recent housing boom in Mongolia occurred from the second quarter (Q2) of 2012 to first quarter (Q1) of 2014, and that the subsequent housing bust lasted 4 years. Both house-specific factors and macroeconomic variables had a significant influence on housing price dynamics. Mortgage interest rate semielasticity and real household income elasticity were estimated as −3 and 1.4, respectively. Dynamic analysis of the estimated vector error correction models suggests that the country’s policy intervention in the mortgage market—introducing an interest rate subsidy on mortgage loans for residential properties of up to 80 square meters—drove the recent housing boom in Mongolia. Keywords: booms and busts; house prices; Mongolia; mortgage interest rate subsidy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wsi:adrxxx:v:38:y:2021:i:02:n:s0116110521500050 Ordering information: This journal article can be ordered from DOI: 10.1142/S0116110521500050 Access Statistics for this article Asian Development Review (ADR) is currently edited by Tetsushi Sonobe More articles in Asian Development Review (ADR) from World Scientific Publishing Co. Pte. Ltd. |
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