Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 2nd International Conference on Business and Policy Studies
Series Vol. 14 , 13 September 2023
Open
Access | Article
The Impact of Two-pillar Policies on Real Estate Prices in China
* Author to whom correspondence should be addressed.
Abstract
Since the turn of the 20th century, China's real estate industry has been expanding, playing an increasingly vital role in fostering the growth of the national economy. On the one hand, rising housing costs can stimulate the growth of linked companies. Nonetheless, it also causes a number of social issues. Through theoretical research, this study examines the impact of two-pillar policies (monetary policy and macroprudential regulations) on real estate values in China. The analysis reveals that quantitative monetary policy influences real estate prices via credit scale, whereas price-based monetary policy influences real estate prices via loan interest rate. However, there is a tension in monetary policy between "boosting the economy" and "stabilizing property prices". When monetary policies govern housing prices, macroprudential policies, particularly LTV instruments, can avert systemic problems and compensate for the spillover effects on the real economy. Consequently, it is imperative to establish and enhance the regulatory framework for two-pillar policies.
Keywords
two-pillar policies, monetary policy, macroprudential policies, real estate prices
References
1. Jia Pengfei and Lim, King Yoong. Tax Policy and Toxic Housing Bubbles in China[J].The B.E. Journal of Macroeconomics, 2021,21(1):151-183.
2. Liu Jinquan, Zhang Yunfeng and Bi Zhenyu. Real estate price fluctuation, business cycle and monetary policy effect[J]. Contemporary Economic Research,2022,(01):95-106.
3. Ma Li and Fan Wei. Research on the "Dual pillar" regulation of Monetary policy and macroprudential policy in promoting " A house is for living in, not for speculation" [J]. China Industrial Economics,2021,(03):5-23.
4. Michiel De Pooter, Giovanni Favara, Michele Modugno, Jason Wu. Monetary Policy Uncertainty and Monetary Policy Surprises[J]. Journal of International Money and Finance, 2021,112: 1-33.
5. Li Peixian. The impact of loose monetary policy on housing prices under the pandemic——an event-based analysis[J]. Jiangsu Commercial Forum,2021, (08):69-73.
6. Sui Jianli, Liu Biying, Li Zhigang and Zhang Chengping. Monetary and macroprudential policies, output, prices, and financial stability[J]. International Review of Economics & Finance,2022,78: 212-233.
7. He Guohua and Xu Mengjie. The effectiveness of macroprudential policy in regulating cross-border capital flow risk——based on the perspective of bank stability[J]. Studies of International Finance,2022,(08):65-75.
8. Peter J. Morgan, Paulo José Regis, Nimesh Salike. LTV policy as a macroprudential tool and its effects on residential mortgage loans[J]. Journal of Financial Intermediation,2019,37: 89-103.
9. Ma Caoyuan and Li Yumiao. Analysis on the effectiveness of macroprudential policy instrument LTV in regulating real estate market [J]. Nankai Economic Studies,2020,(06):122-141.
10. Wu Di, Zhang Churan and Hou Chengqi. Housing prices, financial stability and macroprudential policy [J]. Journal of Financial Research,2022, (07):57-75.
Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open Access Instruction).
- Volume Title
- Proceedings of the 2nd International Conference on Business and Policy Studies
- ISBN (Print)
- 978-1-915371-71-3
- ISBN (Online)
- 978-1-915371-72-0
- Published Date
- 13 September 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/14/20230796
- Copyright
- 13 September 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited