Policy-Driven Boom and Bust in the Housing Market: Evidence from Mongolia
This paper examines the effects of a mortgage interest rate subsidy on booms and busts in the housing market by analyzing the Housing Mortgage program in Mongolia. We find that the most recent housing boom in Mongolia occurred from the second quarter (Q2) of 2012 to first quarter (Q1) of 2014, and t...
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| Format: | Article |
| Language: | English |
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World Scientific Publishing
2021-09-01
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| Series: | Asian Development Review |
| Subjects: | |
| Online Access: | https://www.worldscientific.com/doi/10.1142/S0116110521500050 |
| _version_ | 1797829076504805376 |
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| author | GAN-OCHIR DOOJAV DAVAASUKH DAMDINJAV |
| author_facet | GAN-OCHIR DOOJAV DAVAASUKH DAMDINJAV |
| author_sort | GAN-OCHIR DOOJAV |
| collection | DOAJ |
| description | This paper examines the effects of a mortgage interest rate subsidy on booms and busts in the housing market by analyzing the Housing Mortgage program in Mongolia. We find that the most recent housing boom in Mongolia occurred from the second quarter (Q2) of 2012 to first quarter (Q1) of 2014, and that the subsequent housing bust lasted 4 years. Both house-specific factors and macroeconomic variables had a significant influence on housing price dynamics. Mortgage interest rate semielasticity and real household income elasticity were estimated as −3 and 1.4, respectively. Dynamic analysis of the estimated vector error correction models suggests that the country’s policy intervention in the mortgage market—introducing an interest rate subsidy on mortgage loans for residential properties of up to 80 square meters—drove the recent housing boom in Mongolia. |
| first_indexed | 2024-04-09T13:14:39Z |
| format | Article |
| id | doaj.art-76a6c2df883f45e3b4a5918902aa229d |
| institution | Directory Open Access Journal |
| issn | 0116-1105 1996-7241 |
| language | English |
| last_indexed | 2024-04-09T13:14:39Z |
| publishDate | 2021-09-01 |
| publisher | World Scientific Publishing |
| record_format | Article |
| series | Asian Development Review |
| spelling | doaj.art-76a6c2df883f45e3b4a5918902aa229d2023-05-12T00:59:15ZengWorld Scientific PublishingAsian Development Review0116-11051996-72412021-09-01380227931710.1142/S0116110521500050Policy-Driven Boom and Bust in the Housing Market: Evidence from MongoliaGAN-OCHIR DOOJAV0DAVAASUKH DAMDINJAV1Bank of Mongolia, Ulaanbaatar, MongoliaBank of Mongolia, Ulaanbaatar, MongoliaThis paper examines the effects of a mortgage interest rate subsidy on booms and busts in the housing market by analyzing the Housing Mortgage program in Mongolia. We find that the most recent housing boom in Mongolia occurred from the second quarter (Q2) of 2012 to first quarter (Q1) of 2014, and that the subsequent housing bust lasted 4 years. Both house-specific factors and macroeconomic variables had a significant influence on housing price dynamics. Mortgage interest rate semielasticity and real household income elasticity were estimated as −3 and 1.4, respectively. Dynamic analysis of the estimated vector error correction models suggests that the country’s policy intervention in the mortgage market—introducing an interest rate subsidy on mortgage loans for residential properties of up to 80 square meters—drove the recent housing boom in Mongolia.https://www.worldscientific.com/doi/10.1142/S0116110521500050booms and bustshouse pricesMongoliamortgage interest rate subsidy |
| spellingShingle | GAN-OCHIR DOOJAV DAVAASUKH DAMDINJAV Policy-Driven Boom and Bust in the Housing Market: Evidence from Mongolia Asian Development Review booms and busts house prices Mongolia mortgage interest rate subsidy |
| title | Policy-Driven Boom and Bust in the Housing Market: Evidence from Mongolia |
| title_full | Policy-Driven Boom and Bust in the Housing Market: Evidence from Mongolia |
| title_fullStr | Policy-Driven Boom and Bust in the Housing Market: Evidence from Mongolia |
| title_full_unstemmed | Policy-Driven Boom and Bust in the Housing Market: Evidence from Mongolia |
| title_short | Policy-Driven Boom and Bust in the Housing Market: Evidence from Mongolia |
| title_sort | policy driven boom and bust in the housing market evidence from mongolia |
| topic | booms and busts house prices Mongolia mortgage interest rate subsidy |
| url | https://www.worldscientific.com/doi/10.1142/S0116110521500050 |
| work_keys_str_mv | AT ganochirdoojav policydrivenboomandbustinthehousingmarketevidencefrommongolia AT davaasukhdamdinjav policydrivenboomandbustinthehousingmarketevidencefrommongolia |