![]() ![]() To Compete, or Non-Compete: The Effects of Employee Non-Compete Agreement.Improving Health Care Quality and Values: Local Challenges and Local Opportunities.Geography, Venture Capital, and Public Policy.Did Credit Market Policies Cause the Housing Bubble?.How Massachusetts Can Stop the Public-Sector Virus.Which Places Are Growing? Seven Notable Trends from Newly Released Census Data.The Impact of Rappaport Public Policy Fellows Program on Career Trajectories.Healthy, Wealthy, and Wise: Improving the Productivity of Massachusetts' Health Care Spending.Building Effective City-University Partnerships: Lessons from the Heartland.First Degree Earns: The Impact of College Quality on College Completion Rates.Using Technology to Improve Transportation: All Electronic-Tolling and Beyond.Greater Boston's Economy and the Entrepreneurial Age.Talking with Mayor Marty Walsh: A City-Wide Town Hall.The Long-Run Impacts of Tracking High-Achieving Students: Evidence from Boston's Advanced Work Class.City Hall's Technology Journey: Using Data to Improve the Lives of Citizens.Racial Diversity in the Teacher Pipeline.Policy Recommendations to Address How Trauma, Mental Health & Substance Use Disorders Contribute to Incarceration.Can Police Improve Homicide Clearance Rates?.Subsidizing Health Insurance for Low-Income Adults.School District Turnaround: Learning from Leadership in Lawrence, Massachusetts.Increasing Diversity in Boston's Exam Schools.With that in mind, some ECB policymakers suggest the central bank should give house prices greater weight when estimating inflation and setting interest rates, as it happens in New Zealand. Home prices there rose by 14.4% last year despite tough limits introduced in 2015, which cap mortgages at 3.5 times a borrower's gross annual income. "When rates are too low it’s an uphill struggle," he said. ![]() That could be the case in the euro zone, some economists say, doubting regulation will make much of a difference as long as mortgage rates remain below inflation, making property investments appealing for households and professional investors alike.īorrowers were locking in an annual mortgage interest rate of just 1.3% for 10 years in December, according to the latest ECB data, compared to an expected inflation rate of just under 2% over that period.Ĭommerzbank's Kraemer is one of many economists who expect these negative real yields to persist, blunting the effect of regulatory curbs. Yet research shows monetary policy still matters and can either make macro-prudential regulation more effective if it supports it or it can trump if it works in the opposite direction. Stock of loans to households for house purchases (EUR mln) "We need an independent financial stability council that can bite." "There’s no cost for a politician for not acting," said Bruegel's Claeys. The ESRB said this month that Finland and the Netherlands were not doing enough to curb mortgage lending despite its recommendations. "It requires a very independent position." "When you implement tough macroprudential measures, you disturb the party," said Commerzbank's chief economist Joerg Kraemer. Germany for example has only just announced plans to apply some brakes, a decade after the start of its housing boom and with house prices already 20%-35% over-valued according to the Bundesbank. This is why national regulators in the euro zone, who often include government officials who would pay the electoral price of public backlash, have been dragging their feet. Yet it would also require some unpopular choices, like making mortgages all but unaffordable to poorer households. "That would have a very strong impact and very fast," said Matthias Holzhey, who co-authors UBS's annual Global Real Estate Bubble Index. South Korean authorities were able to slow down house price growth by imposing a debt-to-income ratio in the early 2000s.Īnd Sweden briefly managed to bring down the cost of a dwelling in 2018 by demanding that homeowners repay at least 1% of their loan balance every year if they took mortgages greater than 4.5 times their household income. ![]() History shows this type of regulation can work. ![]()
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