Rising House Prices Research Articles

PRELIMINARY HOUSING CONTINUUM MODEL FRAMEWORK FOR YOUNG HOUSEHOLDS IN GREATER KUALA LUMPUR

Owning a house had been the standard for adults until property prices increased, particularly in urban regions. The price increase led to homeownership becoming a pipe dream for most people. Young households (YH) that intend to purchase a house are subject to social and economic challenges, including a housing policy gap such as devoting attention solely to low-income earners and overlooking the middle-income demographic. The study objectives were to examine housing affordability issues among YH in Greater Kuala Lumpur (GKL) and to review the housing continuum model (HCM) globally. The study data were collected through questionnaire surveys of 323 randomly sampled respondents aged 20–39 years living in GKL. Resultantly, rising housing prices, lower household income, and limited housing choices contributed to YH affordability issues. Furthermore, homeless shelters, social or public housing, affordable housing, rental housing, and private housing were critical HCM components. Based on the findings, the researchers proposed a preliminary HCM framework that can be used to inform YH of available options in the housing market. Moreover, the framework can be used to aid the mitigation of housing affordability problems faced by GKL YH by addressing these issues holistically via framing the components of available houses.

Does Housing Boom Boost Corporate Financialization?—Evidence from China

ABSTRACT This paper provides a fresh look to investigate the linkage between rising house prices and corporate financialization. We match data of house prices in 237 cities with publicly listed non-financial and non-real estate companies to establish the causal relationship and further examine the underlying mechanism. The empirical study confirms that rising housing prices have a positive impact on corporate financialization, thereby emphasizing the significance of the housing boom for corporate financialization. We find that the deterring effect is stronger for firms with high cash holdings and is primarily driven by manufacturing firms. In addition, this study explores the potential mechanism generated by financing constraints and investment opportunities. The empirical results show that the housing price boom plays a significant role in promoting corporate financialization by releasing financing constraints.

Introducing house prices to the intertemporal current account model: An application to the European Union

The last 30 years have been marked by significant and persistent external imbalances. To examine the relationship between the current account balance and its determinants, particularly house prices, we extend the intertemporal model of the current account. We introduce the prices of durables to the theoretical model to account for house prices. In addition to house prices, the theoretical model also incorporates fiscal balance, income, investment, and government spending to explain external imbalances. We test the model for the European Union's member states between 2000 and 2019 using a system generalized method of moments model, which performs well empirically as the coefficients are significant and have the predicted sign. Our findings indicate that rising house prices exacerbate the current account balance due to the wealth effect on consumption. Within the European Union, house prices have the most negative impact on the current account balance in Central and Eastern European countries. • We examine how house prices affect the current account balance. • We add the prices of durables to the intertemporal model of the current account to account for house prices. • We apply the theoretical model to EU countries from 2000 to 2019 using the system GMM estimator. • We find that rising house prices worsen the current account balance through the wealth effect on consumption. • The impact of house prices on the current account differs significantly in CEEC when compared to other EU member states.

아파트 분양권 전매특성이 아파트 매매가격에 미치는 영향에 관한 연구

The government implemented a real estate policy regulating Finsens in units of each region by designating overheated speculation districts and areas to be adjusted according to the rise in housing prices. These regulated areas include consumer restraint policies. The purpose of this study was to examine the real estate policies related to the characteristics of pre-sale of apartments over a period of 6 years from January 2016 to December 2021, and to examine how these policies affected apartment sale prices by region. For the research method, the Hausmann fixed effect was used to examine the factors that have influence as well the changes according to the characteristics of real estate, macroeconomic characteristics, policy characteristics, and resale characteristics of real estate based on on nationwide and metropolitan area models, specifically the Daegu/Gyeongbuk, Booulgyeong, Chungcheong/Daejeon, and Gwangju/Jeonla models. For the statistical analysis, the model was assessed using the STATA17 version. Results showed it was possible to examine the policies affecting housing price stabilization among various government real estate policies, and to further examine the policies that manifested different results by region. These results should consider detailed customized policies for regions where the real estate market is overheated or where speculation is a concern.

Impact assessment of a primary care physician counseling program for youth population.

This study aimed to investigate the impact of implementing a primary care physician (PCP) counseling program for the youth population with healthcare needs. This quasi-experimental study used a nonequivalent control group pretest-posttest design, and was conducted at Salim Health Innovation Clinic in Seoul between February and October 2019 comprising 46 participating youths (intervention group) and 48 nonparticipating youths (control group). After 6 months of implementation, drinking (alcohol use control) decreased significantly in the intervention group (0.84 points). There was a significant difference in the anxiety level with a decrease of 2.86 and 0.65 points in the intervention and control groups (P = .011) respectively. There was also a significant difference in the health responsibility domain (P = .04). Moreover, a significant difference in self-efficacy level was found with a mean increase of 0.18 and 0.16 points in the intervention and control groups (P = .001), respectively. The youth population is more prone to neglect self-care due to poor physical and mental health status and no hope for the future because of a lack of jobs and rising housing prices. The program reinforces health-promoting behavior for managing stress and practicing eating high-quality meals, regular exercise, and regular health screening, which can help implement continuous and effective healthcare.

A Bubble Doomed to be Pricked Deconstructing the Chinese Real Estate Bubble

China’s real estate housing boom has been a dreadful concern for economists worldwide. This paper analyzes the formation of the Chinese real estate housing bubble and investigates the factors that led to the bubble. Stimulated by the central government’s fiscal pressure, a redistribution of the tax revenues led to China’s local government’s “land financing” strategy, flaming the rise of housing prices. Moreover, due to the global financial crisis of 2008, the Bank of China proposed low-interest rates while the central bank increased credit availability to rejuvenate China’s economic state, which led to long-run damage. Furthermore, the expected traditional filial duty of Chinese parents to prioritize their children’s education as an investment and the obligation of owning a home for males before marriage also triggered the skyrocketing double-digit inflation rates. Finally, economists worry that the increased construction demand due to the rising urban population in the early 1970s will doom the new modern world as the population is now declining, followed by the low demand for housing in the future.

Behavioral Responses to Wealth Taxes: Evidence from Switzerland

We study how declared wealth responds to changes in wealth tax rates. Exploiting rich intranational variation in Switzerland, we find a 1 percentage point drop in a canton’s wealth tax rate raises reported taxable wealth by at least 43 percent after 6 years. Administrative tax records of two cantons with quasi-randomly assigned differential tax reforms suggest that 24 percent of the effect arises from taxpayer mobility and 21 percent from a concurrent rise in housing prices. Savings responses appear unable to explain more than a small fraction of the remainder, suggesting sizable evasion responses in this setting with no third-party reporting of financial wealth. (JEL D91, H24, H26, H31)

The economics of marriage: Evidence from China

Marriage market imbalances are common in modern society for social and economic reasons, including the increased cost of marriage caused by high housing prices and an imbalance in the number of men and women. We draw on the family economic theory of Gary Becker to study the general equilibrium of the marriage market in China. On the one hand, we find that the increasing price of houses, an important measure of marriage cost, has significantly reduced the marriage rate in China. Another determining factor that has reduced the marriage rate is an imbalance in the sex ratio, with more men than women, as a result of China’s one-child policy. On the other hand, higher GDP and educational levels have positive effects on the marriage rate. Interestingly, the rise in housing prices after the implementation of the two-child policy in China has had a more negative impact on the marriage rate. Overall, our findings have important policy implications for government.

News-Driven Housing Booms: Spain Versus Germany

Abstract We investigate how the economy responds to anticipated (news) shocks to future investment decisions. Using structural vector autoregressions (SVARs), we show that news about the future relative price of residential investment explains a high fraction of the variance of output, aggregate investment and residential investment for Spain. In contrast, for Germany it is the news shocks on business structures and equipment that explain a higher fraction of the variance of output, consumption and non-residential investment. We confront the identified shock with other shocks to provide evidence that our structural interpretation is valid. Then, to address our empirical findings, we propose a stylized two-sector model of the willingness to substitute current consumption for future investment in housing, structures or equipment. The model combines a wealth effect driven by the expectation of rising house prices, with a reduced-form friction in labor reallocation. We find that the model calibrated for Spain displays a response to anticipated house price shocks that stimulate residential investment, whereas for Germany those shocks enhance investment in equipment and structures. The results highlight the propagation mechanism of anticipated shocks to future investment, which is consistent with the housing booms in Spain and their absence in Germany. Such a mechanism complements a view relying on a combination of monetary, financial or housing supply and demand, surprise shocks.

Did monetary policy cause a housing bubble in the US?

This article uses quantitative analysis, setting three variables: the federal funds rate, mortgage servicing as a percentage of disposable personal income, and house prices. I made a simple model using the logical relationship of the independent variable, mediator variable, and dependent variable. Then regression analysis is conducted to explore the relationship between monetary policy and real estate bubbles. The conclusion is that loose monetary policy contributed to the housing bubble, but raising the federal funds rate did not contain the rise in housing prices, which means the existing monetary policy tools are insufficient to solve the problem. A better regulatory system is needed to avoid the emergence of bubble economies.

The Impact of House Price on Urban Household Consumption: Micro Evidence from China

The impact of house prices on consumption is an important concern for academics and policy makers. Several studies have documented that house price changes have an impact on consumption; however, there is far less consensus on how house price changes affect consumption in China. The purpose of this paper is to examine the impact of house prices on household consumption in urban China and to identify the mechanisms behind the impact. This study measures the impact of housing price changes on consumption at the household level, using research data from 71,548 home-owning households in the 2011–2019 China Household Finance Survey database. Our analysis shows that housing prices have a significant negative effect on consumption, with a 1% increase in the value of a household’s property causing a 0.0034% decrease in household consumption, an effect that is significant for households that own a home and for those in the eastern and central regions. We find that rising house prices cause an increase in households’ precautionary savings, which is the main mechanism through which house prices affect consumption in China. Furthermore, the impact of house prices on consumption is asymmetric, with consumption moving in the opposite direction when house prices rise but not when house prices fall. This study provides meaningful insights for policy makers on the usefulness of building a healthy and stable housing market to expand consumption and revitalize the economy.

주택조세강화가 수도권 아파트 가격에 미치는 영향에 관한 연구

In this study, the effect of the recently strengthened heavy taxation of capital gains tax and comprehensive real estate tax on the apartment market in the metropolitan area was analyzed using the vector error correction model. As a result of the shock response analysis, the volume of apartment sales transactions in the Seoul metropolitan area had the greatest impact on the apartment sales price index, followed by mortgage loans in the Seoul metropolitan area and GDP. On the other hand, it was found that there was no significant shock reaction to the heavy capital gains tax and the heavy comprehensive real estate tax. However, most parallaxes show negative (-) values, indicating that they negatively affect apartment sales prices in the Seoul metropolitan area. As a result, it can be seen that the apartment market in the metropolitan area is generally affected by changes in the housing tax system, such as heavy capital gains tax and heavy comprehensive real estate tax, along with housing finance, supply, and macroeconomic factors. As a result of this analysis, the housing-related tax strengthening policy can contribute to stabilizing the housing market by lowering housing prices during the rapid rise in housing prices. However, the tax strengthening policy during the period of falling housing prices due to the economic recession can cause a sharp downturn in the housing market.

역세권 2030 청년주택이 인근지역 주택가격에 미치는 영향

It has been proven from the previous research that rising housing prices affect not only timing of the first marriage, but also family planning of young people. In response to housing shortage for young people, the Seoul Metropolitan Government came up with ‘the 2030 Housing Project for young people’ designed to supply social rental housing to young people in areas close to subway station. However, the project had been faced with the opposition from the nearby residents who are concerned with a decline of property value. The main purpose of this study is to analyze the impact of the 2030 Housing Project for young people on the nearby housing prices using a hedonic-based difference-in-difference analysis. The main finding of this research is that the supply of the 2030 Housing Project for young people has a negative effect on the nearby housing prices at first, and then turned into a positive effect over time. Such a result might be related to the fact that young people have a key role to play in fostering local economies and vitalizing commercial districts in the community.

Quantifying the social impacts of the London Night Tube with a double/debiased machine learning based difference-in-differences approach

There is a worldwide trend toward a growing number of people involved in various night-time activities. The night-time public transport service is of central importance for the urban night-time mobility. In London, the Night Tube service was launched in 2016 to meet the constantly growing night-time travel demand and support London’s night-time economy. Yet limited empirical evidence on the ex-post impacts of the London Night Tube has been provided. In this study, we conduct a causal analysis on such impacts using a double/debiased machine learning based difference-in-differences approach. Specifically, we quantify the impacts of the Night Tube on London’s night-time economy, house prices, road crashes and related casualties, and crimes. We further investigate the spatial variations in such impacts. Our results indicate a rise in house prices associated with the announcement and the implementation of the service. The number of night-time workplaces showed a limited response. Regarding the safety dimension, we find that the Night Tube service led to a small reduction in the frequency of road crashes but a substantial reduction in crash-related casualties. However, the crime rate in areas served by the Night Tube was increased, especially for the following two categories, robbery of personal property and violence against the person. Moreover, the impact on the crime rate is found to be larger in the inner London area. These findings provide practical implications for urban planners and policy makers, and reveal the need for monitoring the social impacts of the Night Tube service from a long-term perspective.

Misalignments in house prices and economic growth in Europe

ABSTRACT In this paper we investigate house price misalignments and how they affect the real economy. We estimate the long-term relationship between house prices and the fundamentals that determine long-term house prices for a panel of European countries with dynamic OLS, using data from 2005–2018. We find that income has been the main driver of fundamental house prices in all countries, while the supply of dwellings has calmed the rise in house prices in some of them. We calculate house price misalignments, which are deviations of house prices from the fundamental value, and we employ them in the growth model. The results of the growth regression indicate that house price imbalances amplify business cycles in the short term, but in the long term house price overvaluations slow economic growth down. The findings imply that it is crucial to take measures to stabilize housing cycles.

Comparing the financial impact of housing retrofit policies on Dutch homeowners

The Renovation Wave is the latest addition to a series of European measures designed to incentivise investment in a low-carbon built environment. In terms of residential retrofits, research has focused on how structural measures can reduce costs through energy savings and improve affordability in the long term. However, it is less clear how retrofit policies can positively impact households with different income levels, energy costs and savings’ opportunities across time. EU Member States have provided substantial funding for retrofitting in the form of grants, subsidised loans and tax deductions. This paper addresses with the Netherlands as case study the question: how do different retrofit measures affect the finances and affordability of homeowners in the short and longer term? Our numerical analysis is mainly based on the WoON 2018 dataset, a household-level survey. By focusing on household finances under different financing schemes, this paper aims to place renovation measures in the context of the housing affordability literature. User costs are one of the most important capital-based indicators of long-term affordability. In contrast, cash flows deal with the exchange of money and indicate financial access to housing at a given point in time. In the Dutch context of rising house prices, it is crucial to measure the short and long-term economic impact of energy efficiency measures, as they are likely to have a lasting impact on affordability. Our results show that depending on policy, a majority of homes could be retrofitted with a cost-neutral margin, depending on energy prices and post-retrofit savings. The main barrier to retrofitting is the upfront cost, which threatens short-term affordability. Loans, either subsidised or private, offer an alternative to upfront costs but reduce cost-neutrality. On the other hand, from a user cost perspective, retrofitting lowers costs in the long run. Finally, a cluster analysis shows that middle and higher income groups would be most likely to benefit from retrofitting. This raises the question of the regressive nature and targeting of flat-rate subsidies and tax deductions.

패널자료를 이용한 밀레니얼 세대의 주택점유형태 결정요인 분석

This study examines the determinants of housing tenure choice decisions of Millennials.
 Using KLIPS panel data from 2014 to 2020, a correlated random effects probit model and a fixed effects logit model were estimated to control for endogeneity problem associated with time-invariant unobserved heterogeneity. Estimation results showed that net wealth, relative housing cost, marital status of household heads were major determinants of housing tenure choice decisions. Permanent income, one of key variables on the housing tenure choice, was not significant, indicating that net wealth rather than income is more important to homeownership decisions of Millennials. However, the effect of net wealth on the probability of home owning was estimated to decrease over the observation period because the increase in net wealth could not catch up with the rise of housing price. A sharp decrease of the effect of net wealth on the probability of home owning in recent years was attributable to a dramatic increase in housing price and more stringent mortgage regulations.

주택공급 절차에 관한 법제 개선방안

Housing is an essential element of human survival and the basis of nation maintenance. The Constitution makes it clear that the state should make efforts to ensure that all citizens live a pleasant residential life along with the right to live a human life, and the Government implements various housing policies by preparing housing-related laws such as the Framework Act on Residence and Housing Act. However, due to the rise in housing prices, the polarization of real estate is intensifying, which is spreading to social conflict. The deepening of social conflict due to the polarization of real estate may suggest various causes such as policies and taxes, but it is rarely stable despite various policies, suggesting that we need a different approach. The implementation of housing policies under the Constitution is based on law, it is also necessary to review the part of the housing supply legal system, not the aspect of the housing supply policy. the Framework Act on Residence, the Housing Act, the Special Act on Public Housing, the Special Act on Private Rental Housing, the Act On The Support For Improving The Quality Of Lives Of Tenants In Long-term Public Rental Housing Act, the Housing Benefits Act, as well as sub-laws such as the Housing Supply Regulations can interfere with various regulations. In addition, the Ministry of Land, Infrastructure and Transport Ordinance, which is easier to revise than the law, has the advantage of responding flexibly and quickly to rapidly changing society, but frequent revisions hinder legal predictability and reduce reliability of national policies. In this paper, It aims to improve consistency of the housing supply law and related policies by analyzing the special housing supply law, the relationship between the basic law and each housing supply law, and to seek improvement directions for housing supply Regulations.

The Dynamic Relationship among Bank Credit, House Prices and Carbon Dioxide Emissions in China.

This paper explores the dynamic relationship among bank credit, house prices and carbon dioxide emissions in China by systematically analyzing related data from January 2000 to December 2019 with the help of the time-varying parameter vector autoregression with stochastic volatility (TVP-SV-VAR) model and the Bayesian DCC-GARCH model. Empirical results show the expansion of bank credit significantly drives up house prices and increases carbon dioxide emissions in mosttimes. The rise in house prices inhibits the expansion of bank credit but increases carbon dioxide emissions and aggravates environment pollution, and that the increase in carbon dioxide is helpful to stimulate bank credit expansion and house price rise. In addition, bank credit and house prices are most relevant, followed by bank credit and carbon dioxide emissions, then by house prices and carbon dioxide emissions. Therefore, we believe that in order to stabilize skyrocketing house prices, restrain carbon dioxide emissions, and secure a stable and healthy macro-economy, the government should strengthen management of bank credit, and effectively control its total volume.

Housing wealth effect and tenure choice: An endogenous switching regression analysis

Market sentiment has been playing a important role in Chinese housing market in last two decades, while has not received enough attentions in literature. With this in mind, this paper first establishes sentiment index depicting housing market sentiment in China. Then, the paper uses an endogenous switching regression model to investigate how housing price affects joint determination of housing choice and non-housing expenditure, with regard to the moderating role of market sentiment. This paper finds that the rising housing prices is negatively related to the probability of being an owner and positively associated with consumption. However, the counter-factual analysis the choice of being a owner has a negative effect on consumption over all and such an effect can be weakened by having a mortgage. A higher sentiment can improve the likelihood of home ownership and reduces non-housing consumption. This study helps households to optimize the wealth allocation and governments in their housing policy strategies and developers in their property development.