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Loan-to-Value Ratio and Housing Price: Empirical Evidence From Indonesia

The subprime mortgage crisis in 2007-2009 which led to a global recession has highlighted the importance
of regulating credit for housing market. The urgency arises not only to manage non-performing
ratio, but further to manage price in the housing market which is a potent source of financial imbalance.
Loan-to-value (LTV) regulation is imposed in order to dampen the housing price cycle, preventing
the occurrence of bubble issue. This study tries to capture the influence of LTV implementation
on housing price and assesses its effectiveness in the national scope. Error correction model is used
to portray the short and long-term dynamics of housing cycle with regard to policy, macroeconomic,
and financial variables. We concluded that LTV is an effective policy to dampen the price cycle in the
long run, but not in the short run. In the short run, housing price is closely determined by the macroeconomic
factors. Furthermore, we found that the implementation of LTV has made housing price to
become more persistent, suggesting a change in the market expectation structure and the behavior of
housing price cycle.

Ketersediaan

Informasi Detail

Judul Seri

JURNAL EKONOMI PEMBANGUNAN; Vol.18 No.2, 2017.

No. Panggil

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Penerbit

Yogyakarta : Muhammadiyah University Press., 2017

Deskripsi Fisik

p. 225-238

Bahasa

English

ISBN/ISSN

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Klasifikasi

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Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

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Subjek

FINANCIAL STABILITY
MACROPRUDENTIAL POLICY
HOUSING PRICE

Info Detail Spesifik

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Pernyataan Tanggungjawab

Charvin Lim, Siwi Nugraheni

Versi lain/terkait

Lampiran Berkas

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