Journal
JOURNAL OF POLICY MODELING
Volume 38, Issue 5, Pages 971-984Publisher
ELSEVIER SCIENCE INC
DOI: 10.1016/j.jpolmod.2016.06.002
Keywords
House prices; Rents; Macroprudential policy
Categories
Ask authors/readers for more resources
Quantifying the real economy effects of macroprudential policy is important at a time when such measures are increasingly being promoted as central to the prevention of future credit and house price bubbles. Recently, like other regulatory authorities, the Irish central bank introduced regulatory limits on mortgage lending aimed at protecting greater financial stability. In this paper, we seek to examine some of the wider implications of these measures for tenure choice in the Irish housing market. We find that a reduction in the loan-to-value ratio, such as may occur as a result of regulatory limits, will lead to a greater demand for rental accommodation, prompting higher rents for a given house price level. While this result is somewhat incidental to financial stability, it does have significant implications for housing policy, particularly, at a time when the Irish housing market is confronted by an acknowledged supply shortage. (C) 2016 The Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available