A Study On Macro-control Policy Of Housing Market Based On Financial Stability

Since the 20 th century,the global financial crisis has shown that there is a close relationship between the housing market and financial risks,which is the source of potential systemic financial risks.The financial crisis caused by the fluctuation of housing prices has become one of the typical characteristics of modern financial crisis.Since China started the commercialization of housing reform in 1998,the real estate industry has grown rapidly and become the pillar industry of the national economy.The housing prices have been rising continuously throughout the country,which implies that the potential financial risks of asset bubbles in the housing market have been gathering.In view of the lessons of the international financial crisis,optimizing the macro-control system and preventing the potential financial risks of the housing market are the important contents of preventing and resolving the systemic risks.From the experience of China's existing housing market regulation policy,it includes not only administrative regulation like limited purchase,limited sale and limited price,but also macro-prudential policy,monetary policy and fiscal policy,such as adjusting down-payment ratio and interest rate of housing loans as well as tax in housing transactions.Nevertheless,the housing market is still in a spiral upward cycle of "regulation—price rise—re-regulation—price rise again",and the potential risks of the housing market are also accumulating with the rising of housing prices.Therefore,it is an important subject to improve the macro-control system of the housing market in China to prevent systemic financial risks at present and in the future,which includes designing Loan-to-Value(LTV)macro-prudential policy adjustment rules,formulating effective real estate tax reform scheme and promoting coordination between macro-prudential policy and monetary policy.In view of above,based on the reality of macro-control in China's housing market,this dissertation constructs DSGE models,analyses the micro-mechanism of financial instability in housing market caused by housing mortgage financing friction,elaborates the policy directions of implementing LTV macro-prudential policy and real estate tax regulation policy to regulate housing market from the perspective of financial stability,designs specific LTV dynamic policy rules and optimal real estate tax schemes as well as the coordinate combination between macro-prudential policy and monetary policy,and puts forward relevant policy suggestions,so as to improve the macro-control policy of the housing market in China.The main conclusions of the dissertation are as follows:1.The mechanism of financial instability in the housing market shows that the financial friction of housing mortgage financing constraints will lead to the deviation of housing allocation and financing scale from the social optimal level under competitive equilibrium,which may cause credit over-prosperity and potential financial instability in the housing market.Implementing LTV policy and real estate tax policy will help to prevent potential financial risks caused by mortgage financing constraints in the housing market.2.As far as macro-prudential supervision policy of housing market is concerned,LTV dynamic rule with counter-cyclical adjustment factor has more significant financial stability effect than current static adjustment rule and the LTV dynamic rule of "anchoring credit" is superior to the LTV dynamic rule of "anchoring housing price" from the perspective of financial stability.Moreover,keeping the dynamic rule of "anchoring credit" with appropriate flexibility plays a helpful role in improving the policy effects on economic and financial stability.3.The long-run impact of the full levy of real estate tax on macroeconomic and financial stability is a "double-edged sword".On one hand,it helps to alleviate the distortion of shift from real economy to virtual economy.On the other hand,it may also lead to a sharp drop in housing prices and a severe credit contraction,which takes negative impact on macroeconomic and financial stability.In the short-term,when the external financial shock occurs,the full levy of real estate tax will worsen the adverse effects of financial risk on economic fluctuations and financial stability,increase the difficulty of dealing with systemic financial risks.Implementing the real estate tax reform with unified preferential exemption policy can not only promote stable economic growth in the long-run and reduce the resistance to reform,but also mitigate the adverse effect of systemic financial risk on financial stability in the short-term.No matter from the view of the short-term or the long-run,the implementation of differentiated and more preferential real estate tax scheme for enterprise-owned productive housing is better than that of the unified preferential exemption reform scheme,which is conducive to the realization of the unity of "steady growth","risk prevention" and "further reform".4.In terms of coordination between macro-prudential policy and monetary policy,the traditional monetary policy has a good effect in maintaining price stability after technological shock,and the augmented monetary policy with macro-prudentialcharacteristics which responds to credit cannot enhance financial stability significantly.After the financial shocks caused by the fluctuation of housing demand,the augmented monetary policy with macro-prudential characteristics is susceptible to the shock direction and has a typical asymmetric effect.When the negative financial shock occurs,there will be a serious conflict between the price stability goal and the financial stability goal.The combination of traditional monetary policy and independent LTV macro-prudential policy can overcome potential policy conflicts under different external shocks and thus improve social welfare.The dissertation expands and deepens the theoretical research on the use of LTV macro-prudential policy tools to mitigate financial risks,broadens the research horizon of real estate tax policy from the perspective of financial stability,and enriches the research in the field of coordination between macro-prudential policy and monetary policy.The research is helpful to improve the current macro-prudential policy system of the housing market in China and provide alternative real estate tax reform scheme which is conducive to the realization of the unity of "steady growth","risk prevention" and "further reform",as well as providing a useful reference for the coordination between monetary policy and macro-prudential policy within the central bank.