How Effective are Macroprudential Policies on the Housing Market: Evidence from Hong Kong SAR

DOI

10.2991/978-94-6463-268-2_13How to use a DOI?

Keywords

Macroprudential policy instruments; credit growth; housing price growth; Hong Kong SAR

Abstract

As counter-cycle tools, macroprudential policies have been utilized extensively in Asia to limit credit growth and tame housing price inflation. Utilizing a new policy action dataset and macroeconomic data of Hong Kong SAR, this paper analyzes the effects of macroprudential policies on stabilizing the credit and housing market. To investigate the efficacy of these measures, this paper adopts two empirical approaches. In traditional regressions, results show that loan-to-value (LTV) limit caps and debt-to-income (DTI) ratio have an indiscernible impact on the credit and housing market, and that most of policy actions are of less predictive value. In the difference-in-differences analysis, the loosening LTV policy in response to the Covid-19 crisis does not have the desired magnitude to heat up the credit and housing market, even if the asymmetric effects of tightening and loosening policies are taken into consideration. According to the analysis, heterogeneity in economies influences the effectiveness of macroprudential instruments and certain features in the financial system may make these policy instruments ineffective. Overall, these results shed light on guiding further exploration of the impacts of macroprudential policies in heterogeneous economies.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Aomeng Zhang
PY  - 2023
DA  - 2023/10/10
TI  - How Effective are Macroprudential Policies on the Housing Market: Evidence from Hong Kong SAR
BT  - Proceedings of the 2023 2nd International Conference on Economics, Smart Finance and Contemporary Trade (ESFCT 2023)
PB  - Atlantis Press
SP  - 97
EP  - 106
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-268-2_13
DO  - 10.2991/978-94-6463-268-2_13
ID  - Zhang2023
ER  -