Housing Prices, Bank Lending, and Monetary Policy

De Nederlandsche Bank Research Series Supervision Paper No. 31

23 Pages Posted: 29 Feb 2004

See all articles by Ralph De Haas

Ralph De Haas

European Bank for Reconstruction and Development; Centre for Economic Policy Research (CEPR); Tilburg University - Department of Finance

Irene de Greef

De Nederlandsche Bank

Date Written: September 2000

Abstract

In order to gain more insight into the relationship between housing prices and mortgage lending, we estimate models for both the Dutch housing and the mortgage market. The empirical analysis presented in this paper offers support for the hypothesis that in the Netherlands housing prices and mortgage lending are interdependent. According to our model, housing prices were influenced by changes in bank lending criteria during the estimation period, even when we control for variables such as disposable household income, mortgage interest rate, demographic developments and the housing stock. Mortgage lending was found to be dependent on housing prices as well as disposable income. Our analysis further suggests that in the short run housing prices can deviate substantially from their long-run equilibrium value.

Keywords: housing price, bank lending, monetary policy, mortgages

JEL Classification: D45, E32, E51, G12, G21, R21

Suggested Citation

De Haas, Ralph and de Greef, Irene, Housing Prices, Bank Lending, and Monetary Policy (September 2000). De Nederlandsche Bank Research Series Supervision Paper No. 31, Available at SSRN: https://ssrn.com/abstract=510602 or http://dx.doi.org/10.2139/ssrn.510602

Ralph De Haas (Contact Author)

European Bank for Reconstruction and Development ( email )

One Exchange Square
London, EC2A 2JN
United Kingdom

HOME PAGE: www.ebrd.com

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Tilburg University - Department of Finance ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Irene de Greef

De Nederlandsche Bank ( email )

P.O. Box 98
1000 AB Amsterdam
Netherlands

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