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SMU SOE Seminar (September 7, 2022):Impacts of LTV Policy on the Mortgage Market via Housing Speculation
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TOPIC:
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IMPACTS OF LTV POLICY ON THE MORTGAGE MARKET VIA HOUSING SPECULATION
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ABSTRACT
Using China's loosening of loan-to-value (LTV) policy for secondary houses during 2014Q4-2016Q3 as a unique experiment and the administrative data of more than 3 million mortgage originations, we study how LTV policy for secondary houses influences housing and mortgage markets. We find, empirically, that this policy change fueled a housing boom by encouraging mortgage demand for primary homes, especially by the middle-aged high-income households. We develop a theoretical model to show that such a policy has a quantitatively large impact on house prices and mortgage loan originations on primary homes via existing homeowners' trading up for housing speculation.
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Click here to view the paper.
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PRESENTER
Kaiji Chen
Emory University
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RESEARCH FIELDS
Macroeconomics
Financial Economics
Chinese Economy
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DATE:
7 September 2022 (Wednesday)
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TIME:
4pm - 5.30pm
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VENUE:
Meeting Room 5.1
School of Economics Level 5
Singapore Management University
90 Stamford Road
Singapore 178903
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