Specialized Financial Intermediaries and the Impact of Savings and Loan Contracts on Real Estate Finance

48 Pages Posted: 23 Nov 2016 Last revised: 23 Oct 2017

See all articles by Manuel Molterer

Manuel Molterer

Zeppelin University

Julian Amon

Vienna University of Economics and Business - Department of Finance, Accounting & Statistics

Marcel Tyrell

Zeppelin University

Date Written: October 22, 2017

Abstract

Using several different datasets obtained from the German Central Bank (Deutsche Bundesbank) and the German Federal Statistical Office, we provide empirical evidence that savings and loan contracts (SLCs) are a macrosocial phenomenon that smoothes housing demand by setting countercyclical incentive structures. Such contracts can thus serve theoretically as important stabilizers of housing (loan) demand. This idiosyncratic characteristic of the German real estate finance market, provided by German building societies (“Bausparkassen”), may also explain the notorious stability of the country's housing market. The significant macroeconomic importance of housing market stability has been prominently highlighted in the context of the 2007-2008 financial crisis, which was triggered by the collapse of the U.S. subprime mortgage market. This research is particularly relevant for countries that experienced fragile housing markets with a high level of cyclicality in demand and nominal house prices.

Keywords: Real Estate Finance, Financial Intermediation, Housing Markets, Financial Stability, Mortgage Financing, Building Societies, Savings and Loan Contracts

JEL Classification: E21, E43, E44, G21, G28, R21

Suggested Citation

Molterer, Manuel and Amon, Julian and Tyrell, Marcel, Specialized Financial Intermediaries and the Impact of Savings and Loan Contracts on Real Estate Finance (October 22, 2017). Available at SSRN: https://ssrn.com/abstract=2873919 or http://dx.doi.org/10.2139/ssrn.2873919

Manuel Molterer (Contact Author)

Zeppelin University ( email )

Am Seemooser Horn 20
DE-88045 Friedrichshafen
Germany

Julian Amon

Vienna University of Economics and Business - Department of Finance, Accounting & Statistics ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

Marcel Tyrell

Zeppelin University ( email )

Am Seemooser Horn 20
Friedrichshafen, Lake Constance 88045
Germany

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