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Government Policy and Sustainable Development of the Housing Economics

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A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: closed (25 September 2021) | Viewed by 13683

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Prof. Dr. I-Chun Tsai

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Guest Editor

Department of Finance, National University of Kaohsiung, Kaohsiung, Taiwan
Interests: real estate; housing economics; housing markets; finance
Special Issues, Collections and Topics in MDPI journals

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Dear Colleagues,

After the subprime mortgage crisis in the U.S. housing market in 2007, risk in housing markets and its influence on economics have become crucial topics. There has been an expansion of theoretical and empirical research on housing economics and government policy. Considerable research has focused on factors that destabilize the real estate and financial markets and on policies that governments should consider.

Although traditional theory suggests that the asset market can be corrected quickly through an influx of arbitrage funds when imbalanced and that the market would not remain inefficient for long periods, a lack of liquidity has always been a potential cause of inefficiency in the housing market. Inefficiency in the housing markets can cause the markets to adjust or correct at a slow pace, resulting in market bubbles and collapse. Fluctuations in the housing market will affect financial stability and economic growth. Hence, housing market bubbles, the inefficiency of the housing market, the relationship between the housing market and the performance of the economy, and the effect of government policy on housing markets are questions that need to be addressed.

We invite investigators to contribute original research articles on theory, practice, and applications of “Housing Economics and Government Policy”. All submissions must contain original unpublished work and may not be under consideration for publication elsewhere.

Prof. Dr. I-Chun Tsai
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 2400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

Real estate finance and investment
Housing market and financial stability
Housing and long-run economic growth
Housing market bubble and collapse
Risk in housing markets
Inefficiency of housing market
Housing market and monetary policy
Effects of government policy on housing markets

Published Papers (5 papers)

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Research

13 pages, 270 KiB

Open AccessArticle

Consumers’ Choice between Real Estate Investment and Consumption: A Case Study in Taiwan

by Wei-Ling Tsou and Chen-Yi Sun

Sustainability 2021, 13(21), 11607; https://doi.org/10.3390/su132111607 - 20 Oct 2021

Cited by 7 | Viewed by 2784

Abstract

Real estate has two major characteristics, representing a consumption good and an investment good. Family housing demands are affected by various factors such as family members, the stage that the current house is at in its life cycle, income, location preferences, and so on. To understand which kind of homebuyer backgrounds will increase the proportion of residential investment, this study applies a multinomial logit model to analyze the probability of investment or consumption decisions made by home buyers from different backgrounds in Taiwan. Empirical data show that middle-aged singles and middle-aged couples are less likely to purchase houses to be their personal residence. For young couples and young families, having a personal residence is still a primary consideration, which means that this need is a result of how they are in the early stages of their life cycle when they are not yet financially stable and may expect to have (or already have) children. Families with children show a higher demand for changing residences, which is why full-nest families and three-generation families are more frequently the owners of their personal residence. In addition, the purchase motives of full-nest families include their view of real estate as an investment good, which means that the purchasers have a stable family structure and a degree of financial stability. It also means that with their children growing up, these purchasers exhibit a higher demand for purchasing real estate as an investment the next time they change residence. Full article

(This article belongs to the Special Issue Government Policy and Sustainable Development of the Housing Economics)

15 pages, 2263 KiB

Open AccessArticle

Analysis of Housing Market Dynamics Considering the Structural Characteristics of Mortgage Interest

by Insoo Baek, Sanghyo Lee, Joosung Lee and Jaejun Kim

Sustainability 2021, 13(19), 10523; https://doi.org/10.3390/su131910523 - 22 Sep 2021

Cited by 1 | Viewed by 2608

Abstract

Mortgage loan interest rates consists of base interest and spread. In general, the base interest is adjusted by the government for the sustainability of the housing market. On the other hand, spread is determined by market mechanisms. Accordingly, the change pattern of base interest and spread may appear differently depending on the market situation. In the end, the effect of the government’s market intervention through interest rate policy may be different than expected. In this respect, the purpose of this paper is to analyze the effects of base interest and spread of the mortgage loan interest rate on the housing market and to derive important policy implications for the sustainability of the housing market. As a result of this study, the ineffectiveness of the government’s interest rate policies on the stability of the housing market was confirmed. The market mechanisms had more significant effects on the sustainability of the housing market than artificial political intervention. Further, housing supply policies based on the market mechanism could be more effective than housing demand policies based on interest-rate adjustments. Full article

(This article belongs to the Special Issue Government Policy and Sustainable Development of the Housing Economics)

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19 pages, 1168 KiB

Open AccessArticle

Real Estate, Economic Stability and the New Macro-Financial Policies

by José A. Carrasco-Gallego

Sustainability 2021, 13(1), 236; https://doi.org/10.3390/su13010236 - 29 Dec 2020

Cited by 11 | Viewed by 3197

Abstract

The influence of real estate on finance and the whole economy has captured significant attention, especially since the aftermath of the Great Recession, because of the potential of this sector to destabilize markets. This paper explores the other way around: housing markets’ capacity to stabilize the economy through different macroprudential policies facing several types of shocks to achieve financial stability as a driver of sustainability. Specifically, a dynamic stochastic general equilibrium model is used to evaluate the effectiveness to stabilize the economy of different macroprudential tools based on the loan-to-value ratio for real estate, on the countercyclical capital buffer for the financial sector and a combination of both tools, facing a housing price shock, a technology shock and a financial shock. The model presents three types of agents (borrowers, entrepreneurs and banks) in an economy with a real estate market, a financial sector, a labor market and a production sector. The government can use different macroprudential policies to stabilize the economy, leaning against the wind of several shocks to achieve economic and financial sustainability. The assessment of the effectiveness of each policy shows that, in the case of a housing sector shock and a technology shock, the more effective policy is the one based on a countercyclical rule on the loan-to-value ratio for the real estate sector as a macroprudential tool. Furthermore, with a house price shock, if the macroprudential authority applies a macroprudential policy based on the countercyclical capital buffer, the shock may be exacerbated. Additionally, when there is a financial shock, the macroprudential authority may face a trade-off between several macro-financial policies depending on its objective. Therefore, it is not recommendable to automatically apply a macroprudential policy without a meticulous analysis of the nature of the shock that the economy is experimenting with and how different policies can stabilize or destabilize the different markets and, therefore, reach higher or lower sustainability. Full article

(This article belongs to the Special Issue Government Policy and Sustainable Development of the Housing Economics)

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20 pages, 1891 KiB

Open AccessArticle

Importance of Proper Monetary Liquidity: Sustainable Development of the Housing and Stock Markets

by Ming-Chu Chiang and I-Chun Tsai

Sustainability 2020, 12(21), 8989; https://doi.org/10.3390/su12218989 - 29 Oct 2020

Cited by 1 | Viewed by 1820

Abstract

In this paper, we infer that when no excess monetary liquidity exists, people tend to invest available capital in assets associated with a high return or low risk. However, when excess monetary liquidity occurs, capital may successively boost asset markets, and the stock market wealth is thus likely to spill into housing markets, resulting in bubbles in these two markets and therefore in the unsustainable development of both the housing and stock markets. This paper uses relevant data from the United Kingdom from January 1991 to March 2020 to verify whether excess monetary liquidity is a crucial factor determining the relationship between the housing and stock markets. Continuous and structural changes are found to exist between housing price and stock price returns. This paper employs the time-varying coefficient method for estimation and determines that the influence of stock price returns on housing returns is dynamic, and an asymmetrical effect can occur according to whether excess monetary liquidity exists. An excessively loose monetary policy increases asset prices and can thus easily result in a mutual rise in asset markets. By contrast, when excess monetary liquidity does not exist, capital transfer among markets can prevent autocorrelation during excessive market investment and thereby aggravate market imbalance. Full article

(This article belongs to the Special Issue Government Policy and Sustainable Development of the Housing Economics)

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12 pages, 2675 KiB

Open AccessArticle

Spatio-Temporal Changes of Housing Features in Response to Urban Renewal Initiatives: The Case of Seoul

by Hee Jin Yang

Sustainability 2020, 12(19), 7918; https://doi.org/10.3390/su12197918 - 24 Sep 2020

Cited by 1 | Viewed by 1990

Abstract

Over the past two decades, Seoul has been in a transitional period in terms of urban renewal approaches. Housing is a fundamental element of citizens’ lives and the built landscape, thus, it deserves thoughtful scrutiny. As such, this study empirically investigates the dynamics of the spatial and temporal characteristics of housing stock within the context of new urban renewal policies in Seoul. A fine-grained and multifaceted analysis shows that the supply of new apartments has decreased over time, revealing that denser housing redevelopment in the inner city has become more difficult. In addition, an exploratory spatial data analysis indicates that although spatial clustering of old housing units has been reduced, new housing units have become more spatially distributed and outwardly dispersed over time. Since the physical and locational changes of housing stock are closely related to urban renewal initiatives, this study suggests that the city government needs to incorporate the concept of sustainable urban growth management into its housing supply and renewal policies. Full article

(This article belongs to the Special Issue Government Policy and Sustainable Development of the Housing Economics)

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