Abstract
First, housing bubbles were found in major cities between 2004 and 2015 by a bubble test. Second, by panel estimations on banks during 2007–2015, housing prices were found to have significantly negative impact on non-performing loans (NPLs). Third, by panel estimations on 19 industrial sectors during 2005–2015, housing prices were also found to have significantly negative impact on NPLs. Fourth, housing prices Grangers caused NPLs but the opposite was rejected. Finally, “restriction of speculative housing purchase” used as instruments for housing prices had significantly raised NPLs due to raising vacant houses, decreasing housing investment and profit of housing-related firms.
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