Analysis of The Relationship Between Real Estate Prices and Bank Housing Loans In Taiwan
Date Issued
2013
Date
2013
Author(s)
Kuo, Chen-Ying
Abstract
The U.S. real estate, in the evolution of the subprime mortgage crisis from the kinetic energy to drive economic growth, not only affected the normal mortgage market, corporate lending and credit markets, but also impacted on the integrity of the financial system operations. In Taiwan, over a low interest rate environment and government policy of providing various preferential mortgage, real estate becomes a hedge against inflation and a good investment target, the investor''s funds are moving toward real estate market and making house prices and the amount of bank real estate loans continued to surge. People are concerned about when the bull market will end since the real state has been booming for 10 years since SARS in 2003. Particularly with the end of Fed''s QE (Quantitative Easing) in sight, the risk of turnaround in the housing market increases triggered by rising interest rates. It also causes the increasing borrower''s default rate of real estate loans, as well as substantial bank credit risk. What impacts, with the change of the real estate market, would cause to the banking system worth our intensive attention.
This research analyzes the correlation between bank housing loans and Taiwan real estate prices, while macroeconomic variables including gross domestic product, money supply and interest rates are also involved to compare the overall impact and the relevance. The research period is from 2001 Q1 to 2013 Q2,an aggregate of 50 quarterly data is derived. Time series analysis is used as the empirical method comprising unit root test, cointegration test, vector error correction model, Granger causality test, etc. .
Empirical results show that there is a long-term equilibrium relationship among bank housing loans, real estate prices, gross domestic product, money supply and interest rates .We also find it exists two-way feedback relationship between bank housing loans and real estate prices, which means the interaction is close to each other, and they can be used as a reference for speculating future trends for each other. Therefore, the bank can take the fluctuations of real estate price as an indicator to manage credit risks. The government can strengthen early warning mechanism to control the credit line on the real estate, reduce the risk of fluctuations in the real estate boom, and as a result to ease negative wealth effect caused by house price fall and prevent financial institutions from facing the impact of impairment in asset prices and ultimately stabilize the economic development.
Subjects
房屋價格
房屋貸款
單根
共整合
誤差修正
Granger因果關係
SDGs
Type
thesis
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