Home Buyers Research Articles

Monetary Policy and Home Buying Inequality

Does monetary policy influence who becomes a home owner? Home purchases by low- and moderate-income households may be particularly sensitive to mortgage interest rates, as these households’ budgets are tighter and they more frequently come up against binding payment-to-income ratio constraints in credit decisions. Exploiting the timing of high-frequency observations of mortgage applicants locking in their interest rates around monetary policy shocks, I find that a 1 percentage point policy-induced increase in mortgage rates lowers the presence of low-income households in the population of home buyers by 1 percentage point, and of low- and moderate-income households by 2 percentage points, immediately following the shock. Effects are substantially stronger among first-time home buyers, and persist for approximately one year.

Inventory of Landscape Development Projects in the District of Ouedo (Town of Abomey-Calavi in Benin): Constraints and Sustainable Management

Integral development is a collective and sustainable action, for which the Beninese government subscribes. The protection of nature is not considered as a danger to development, but becomes an indispensable condition for spatial planning, a guarantee of sustainable development. This research aims to understand the inventory of landscaping in the district of Ouèdo. The information collected is the layout of the space, the types of green space, the perceptions of buyers, the different types of housing built, the role of green spaces in the city. This information is collected from resource persons (head of the Ouèdo district, head of the district), buyers of social housing. A total of 150 people are interviewed. The data processing and the analysis of the results are done with the software, Word, the Excel spreadsheet, and the PEIR model. At the end of this research, it was found that 1,949 social housing units are built in Ouèdo . And not all accommodations have standings. Green space is dominated by accompanying green space (65%) and the least important green space (65%) is parks, road line trees and stadium green space. In addition, 85% of buyers believe that the number of green spaces in social housing is sufficient compared to 15%. Similarly, home buyers see green spaces as a way to reconnect with nature (78%), a way to fight against nature (60%) and green spaces very often to have fun (75%), get some fresh air (65%), and recharge your batteries. It is urgent to set up a sustainable management mode for social housing in the city of Ouèdo.

Improving Access to Credit for First-Time Home Buyers under Borrower-Based Measures

As a result of the dynamic rise in real estate prices in recent years, house prices, and therefore the minimum down payment required to obtain a mortgage, more than tripled by 2022 compared to 2014. This led to a deterioration of access to borrowing opportunities typically for young first-time home buyers aged 35 or younger, especially among clients who are not eligible for family support schemes. In this paper, we provide a detailed overview of the potential side effects of the borrower-based measure framework on first-time home buyers. Relative to their credit risk, these clients may be more severely affected by borrower-based measures, generating negative second-round effects. Therefore, in their case preferential limits may be applied, in line with international practice, notably on the level of down payment. However, when making such a decision, it is important to take into account the development of risks in the housing and credit markets and the macroeconomic environment.

Explaining the Effects of Credit Score on Mortgage Rates

In this research project, we are trying to reject the null hypothesis that credit score does not affect the interest rate on a mortgage loan. This is important because the majority of homeowners have financed their home using a mortgage loan, and the interest rate they receive depends on many different factors, including credit scores. If homeowners are aware that a higher credit score will effectively help them lower the interest rate they pay on their mortgage, they can work to improve it and save money. Our main findings indicate that there is a significant relationship between mortgage interest rates, combined loan to value, unpaid principal balance, original loan term, occupancy, property type, and whether they are a first-time home buyer. The data also suggests that credit score does indeed have a statistically significant effect on what kind of interest rate borrowers receive on their loans. A higher credit score will tend to lower the interest payment homeowners must pay on their mortgage.

DECISION SUPPORT SYSTEM FOR SELECTION OF HOME OWNERSHIP LOANS (KPR) USING THE SMART METHOD

The bank is a financial institution that has many activities, one of which is to serve housing loan (KPR) activities. As the human population increases, primary needs such as housing also increase. The existence of a Developer who will provide Home Ownership Loans is also needed for prospective buyers. With various offers, potential home buyers are difficult to make a decision. Therefore the authors through the Decision Support System (SPK) and the design of the Home Ownership Loan system provide a solution for prospective buyers in choosing the best mortgage with a Decision Support System using the SMART method. The SMART method is a multi-criteria decision-making technique based on the theory that each alternative consists of a number of criteria that have values and each criterion has a weight that describes how important it is compared to other criteria

Value Added Tax on Home Purchases by Individuals

Starting from next year, the current system regarding value added tax for home purchases made by individuals will change. The change is made on the value ceilings of the transactions as well as on the number of transactions that can be carried out with the reduced VAT rate. The work aims to highlight the changes brought by the Government Emergency Ordinance no. 16 from 2022.

Impact of 5G Network on the Malaysian Real Estate Industry: Future Homebuyers’ Perspective

The 5G development in Malaysia is still in the preliminary stage. The potential of the development is extremely high which will impact the real estate industry. The impact of 5G development on the Malaysian real estate industry may be assessed from the perspective of prospective property buyers because the real estate is developed for consumers. This research examined the impact of 5G development on the Malaysian real estate industry. The data was obtained through a questionnaire survey distributed to the respondents consisting of the targeted group of prospective house buyers. Exploratory Factor Analysis was employed as the main method of analysis. The factors of sustainability tested from the questionnaire survey were derived from the framework established from the literature review. The study finds that the majority of respondents rate considered all the identified factors as very important to assess the impact of 5G development in Malaysia. Thus, the results indicated that Malaysian prospective home buyers agreed that there will be an impact of 5G development towards the real estate industry. According to the respondents, all of the sustainability variables evaluated will affect the Malaysian real estate market. Therefore, the real estate market players must consider the trend of 5G development in order to deliver essential products and services while taking sustainability factors into account to suit the demands and preferences of future homebuyers.

The Influence of Price and Service Quality on Customer Satisfaction Adidas Store Living World Alam Sutera

This research was conducted with the aim to determine the effect of price, service quality on customer satisfaction Adidas Store Living World Alam Sutera. This study uses primary data sourced from 118 respondents. Data were analyzed using multiple linear regression equations, coefficient of determination (R2), t test and F test. The results showed that the results of the test for the coefficient of determination (R2) obtained Ajusted R Square of 42.3% product, promotion and price variables had an influence on the decision to buy a house at Green Avina in Birem Puntong Langsa Baro and the remaining 57.7% is influenced by other variables not included in this study such as location and facilities. The results of the t test show that partially the product, price and promotion variables have a significant effect on the decision to buy a house at Green Avina Birem Puntong Langsa Baro. The results of the F test show that simultaneously the product, price and promotion variables have a significant effect on home buying decisions at Green Avina Birem Puntong Langsa Baro.

House price dynamics under lower leverage: the case of metropolitan cities in India

PurposeThis paper aims to examine the dynamics of house prices in metropolitan cities in an emerging economy. The purpose of this study is to characterise the house price dynamics and the spatial heterogeneity in the dynamics.Design/methodology/approachThe author explores spatial heterogeneity in house price dynamics, using data for 35 Indian cities with a million-plus population. The research methodology uses panel econometrics allowing for spatial heterogeneity, cross-sectional dependence and non-stationary data. The author tests for spatial differences and analyses the income elasticity of prices, the role of construction costs and lending to the real estate industry by commercial banks.FindingsLong-term fundamentals drive the Indian housing markets, where wealth parameters are stronger than supply-side parameters such as construction costs or availability of financing for housing projects. The long-term elasticity of house prices to aggregate household deposits (wealth proxy) varies considerably across cities. However, the elasticity estimated at 0.39 is low. The highest coefficient is for Ludhiana (1.14), followed by Bhubaneswar (0.78). The short-term dynamics are robust and show spatial heterogeneity. Short-term momentum (lagged housing price changes) has a parameter value of 0.307. The momentum factor is the crucial dynamic in the short term. The second driver, the reversion rate to long-term equilibrium (estimated at −0.18), is higher than rates reported from developed markets.Research limitations/implicationsThis research applies to markets that require some home equity contributions from buyers of housing services.Practical implicationsStakeholders can characterise stable housing markets based on long-term fundamental value and short-run house price dynamics. Because stable housing markets benefit all stakeholders, weak or non-existent mean reversion dynamics may prompt the intervention of policymakers. The role of urban planners, and local and regional governance, is essential to remove the bottlenecks from the demand side or supply side factors that can lead to runaway prices.Originality/valueExisting literature is concerned about the risk of a housing bubble due to relaxed credit norms. To prevent housing market bubbles, some regulators require higher contributions from home buyers in the form of equity. The dynamics of house prices in markets with higher owner equity requirements vary from high-leverage markets. The influence of wealth effects is examined using novel data sets. This research, documents in an emerging market context, the observations cited in low-leverage developed markets such as Germany and Japan.

Legal protection for consumers whose certificates are collateralized by the developer

This study analyzes the Consumer Protection law in adequately protecting home buyers at Violet Garden, Bekasi. These consumers are faced with losing their house certificates because they have guaranteed them to a non-pawnbroker bank (Maybank). Finally, the Central Jakarta Commercial Court ruled that the developer was bankrupt because he was unable to pay his debts. The curator invites the buyer to participate in paying off the developer's debt, which amounts to approximately fifty percent of the purchase price. This investigation uses a normative juridical approach, namely a truth-seeking procedure based on the logic of legal studies from a normative point of view. The results of this study are that banks must protect consumer rights and not cause problems that result in material losses experienced by consumers. Consumers can file lawsuits because the parties responsible for this case are PT Bank Rakyat Indonesia Tbk, PT Bank Tabungan Negara Tbk, and PT Nusuno Karya, and the element of tort has been fulfilled. However, currently, there are no regulations that strictly regulate how a house can be sold by a developer so that the state can protect consumers.How to cite item: Mulia, JR., Wahyudi, E., (2022). Legal protection for consumers whose certificates are collateralized by the developer. Jurnal Cakrawala Hukum, 13(3)281-290. doi:10.26905/idjch.v13i3.8389.

The riskiness of outstanding mortgages in the United States, 1999–2019

AbstractThis article introduces measures of credit risk for all outstanding mortgages in the United States between 1999 and 2019. Terminations play a fundamental role in offsetting risk introduced by new originations because of refinance activity and the often dual nature of home buyers as concurrent sellers. To illustrate these concepts in a policy setting, I show that the Home Affordable Refinance Program increased origination risk metrics but reduced overall risk due to associated terminations of even riskier loans. In addition to these flow dynamics, amortization, loan age, collateral appreciation, and prior selection drive changes to portfolio‐level risk.

Stuck at home: Housing demand during the COVID-19 pandemic

The COVID-19 pandemic induced an increase in both the amount of time that households spend at home and the share of expenditures allocated to at-home consumption. These changes coincided with a period of rapidly rising house prices. We interpret these facts as the result of stay-at-home shocks that increase demand for goods consumed at home as well as the homes that those goods are consumed in. We first test the hypothesis empirically using US cross-county panel data and instrumental variables regressions. We find that counties where households spent more time at home experienced faster increases in house prices. We then study various pandemic shocks using a heterogeneous agent model with general equilibrium in housing markets. Stay-at-home shocks explain around half of the increase in model house prices in 2020. Lower mortgage rates explain around one third of the price rise, while unemployment shocks and fiscal stimulus have relatively small effects on house prices. We find that young households and first-time home buyers account for much of the increase in housing demand during the pandemic, but they are largely crowded out of the housing market by the equilibrium rise in house prices.

Green Home Buying Intention of Malaysian Millennials: An Extension of Theory of Planned Behaviour

The empirical study aimed to examine the factors affecting green home buying intention in Malaysia. The study adopted the popular theory of individual decision-making, the theory of planned behaviour, but extended it with a few new variables to get better predictability. Based on the cross-sectional survey method and quota sampling technique, the instrument-like questionnaire was distributed to the potential buyers who had the intention to buy a home. Data were collected from 741 potential buyers who are young Malaysian students. Collected data were analysed using partial least squares (PLS) modelling (SmartPLS 3.0) in order to measure the strength of the independent variable effects on the dependent variable. The results indicate that attitude, perceived behavioural control subjective norms, perceived value, reasonable pricing and green building knowledge had a positive and significant effect on green home buying intention, with attitude showing the highest effect; the only exception is an environmental concern. This study also validated the theory of planned behaviour (TPB), which provides important insight for the firms involved with the housing development industry for their future business strategy.

주택시장 매칭모형과 금융비용 충격의 동태적 효과

I build up a dynamic search-matching model in both the housing and financial markets in which housing construction is characterized by time-to-build. I calibrate the model to match the key features of the Korean housing market. I examine the dynamic effects of a cost shock that affects the financial institutions issuing loans. An increase in financial costs reduces the financiers’ entry and the home-buyer’s probability of obtaining a loan. Since the value from owning a home tends to decrease while the value from renting a home tends to increase, the number of home buyers falls. Therefore, home prices and sales volume decrease.

Analysing the Factors Influencing the House Prices and Studying House Price Prediction Methods

Home buyers looking for a new house tend to be very cautious with their budgets and market strategies. Theyalways try to optimise the budget in such a way that it matches their requirements and needs. Therefore predictionof price becomes a very important thing when it comes to planning a budget and there is a need for a predictiontool. This can be achieved by doing data analysis notably Exploratory Data Analysis (EDA) and by developingMachine Learning models. An ideal home that a customer dreams of is something that matches as well as fulfils thecustomer’s requirements but at the same time with an appropriate budget. So instead of going to the real estateagent and paying an additional expense in the form of commission, the same work of suggesting and predictingthe price after analysing large data, is done by various machine learning models in a more efficient manner.Thus the research on house price prediction is of much significance as it caters to two stakeholders in this realestate market, home buyers will have a better understanding of property value and will be helped in the decisionmaking process and hence stand a better stand at negotiating. The other stakeholder i.e. the home seller will geta better estimate to put selling cost on property.

Pandemic mobility, second homes and housing market change in a rural amenity area during COVID-19 – The Brecon Beacons National Park, Wales

The Covid-19 pandemic has been presented as a critical change driver for rural amenity areas, precipitating urban flight and a decentralisation of housing choice and investment. House prices in both near-urban and more distant rural markets saw considerable growth in 2020 and 2021, linked to a mix of second home investment, expanded demand for holiday letting, migration to exploit flexible-working opportunities, and homebuying for early retirement. These demand-side pressures, apparently accentuated by the pandemic, combine with supply-side constraints on development in rural areas (which can accommodate a limited amount of additional housing) to produce significant housing stress. However, processes affecting some areas, in different parts of the world, have arguably been generalised to all areas, and localised processes remain under-investigated. This monograph explores the experience of the Brecon Beacons National Park in Wales, UK – an amenity area with good connectivity to a number of major urban centres and therefore sources of extra-local housing demand. Focusing on second home buying, as a leading element of extra-local pressure in amenity areas, the monograph considers the particular circumstances of this area. It shows that a combination of amplified demand-side factors, linked to the pandemic, and heightened supply-side constraints, due to a phosphate crisis affecting the National Park’s major river catchments, requires a programme of actions that extends beyond the housing domain in order to resolve escalating housing market challenges and associated community and economic risks.

Influence of Knowledge and Skills among residents in Kibra Intergrated water, sanitation and waste management project on the wellbeing of Soweto East Residents, Nairobi, Kenya

The study sought out to determine the influence of knowledge and skills among residents in integrated water management influenced on the wellbeing of Soweto East residents in Kibra, Nairobi County. Apart from intense overcrowding, lack of proper and adequate infrastructure, housing and poor sanitation worsened by open sewages and lack of drainage systems have characterized Kibra slums for years. In addition, a series of factors including very low incomes, irregular employment, lack of secure land tenure or collateral, and lack of property and informational records prevent Kibra households from accessing loans to finance construction projects, housing improvements or home purchases. To address these problems, Government of Kenya (GoK) and UN-Habitat instituted Kibra Integrated Water, Sanitation and Waste Management Project (WATSAN) in Soweto East to support small-scale community-based initiatives in water, sanitation and waste management as an entry point, while also aiming at improving the livelihoods of people living in Soweto East. Study sought to examine the extent to which the Project has been successful in enhancing well-being of Soweto East residents. The study employed descriptive survey research design since it’s most suited when conducting research study to a large population. The sample frame for this study comprised of 980 households from 6400 beneficiaries from Soweto East. The study sample size was 90 respondents distributed randomly among beneficiaries’ households. Data collection was done using questionnaires and was thereafter analyzed quantitatively using SPSS version 20 as a tool and presented in form of frequencies, pie-charts, tables, and graphs. The study found out that knowledge and skills had a positive effect on the wellbeing of Soweto East residents in Kibra, Nairobi County. The study thus concludes that having proper knowledge and skills of water and waste management will translate to improved wellbeing of the slum dwellers. This is because, improvement of all aspects of the environment including sanitation and hygiene requires that the community has proper education and awareness, and these cannot be reached without the proper co-operation from the slum dwellers. The study recommends the need to facilitate stakeholder interaction by encouraging community-based institutions such as women groups, youth groups, Community Development Associations, traditional councils, Water and Sanitation Committees (WASHCOMs) and other identified interest groups. There is also need to educate the residents to enhance awareness on the effects of poor waste and sanitation practices and benefits of KWATSAN. The study further recommends successful enforcement procedures to safeguard efficient waste gathering and dumping.

Household Credit and Regulatory Arbitrage: Evidence from Online Marketplace Lending

We study the relationship between new intermediaries and regulatory arbitrage, analyzing marketplace credit around a tightening of mortgage loan-to-value (LTV) caps in several cities in China in 2013. Using novel data covering over 20% of Chinese marketplace credit as well as the universe of loans and loan applications at a leading online lending platform, we provide evidence consistent with home buyers borrowing online to bypass the tighter LTV cap. Our findings point to new, lightly regulated financial intermediaries as a driver of household leverage, suggesting that they can open nonnegligible regulatory arbitrage channels. This paper was accepted by Victoria Ivashina, finance. Supplemental Material: Data and the online appendix are available at https://doi.org/10.1287/mnsc.2022.4592 .

The impact of a home purchase restrictions (HPR) policy on the distressed property market in Beijing

Distressed property sales, which are carried out under court order by online auction, have increased rapidly in China in recent years. We examine how the implementation of home purchase restrictions (HPR) by the Chinese government in 2017 has affected the market for distressed properties in Beijing. We first use a stylized second-price auction model to derive theoretical predictions for how HPR should impact the number of auction entrants, auction prices/premia, and auction bidders’ average willingness to pay. We then test those predictions using data on court sales from the Taobao online auction platform from 2015 to 2018. By comparing legal auctions of housing before and after April 2017, we obtain empirical results consistent with the model's predictions. Specifically, our analysis documents that auction entrants fell by approximately 70% and auction premia by 16%–27% after the HPR policy was implemented. Furthermore, the average bidder's willingness to pay relative to the seller's valuation fell from 80% to 40%, which suggests that bidders who were affected by HPR had higher valuations, on average, than bidders who weren't.

Can a house resale restriction policy curb speculation? Evidence from a quasi-natural experiment in China

Speculative opportunity is commonly defined as the chance for agents to resell an asset at a higher price. Few previous studies have analyzed how speculation works in housing markets. In this paper, we use a two-stage resale restriction policy implemented in China as an exogenous shock on the speculation chance in the second-hand housing market. We find that a sudden reduction in the future resale opportunity directly causes a significant decrease in house transaction prices and trading volumes. The findings may help regulators strategically intervene in the housing market by adjusting the resale rights of home buyers.