IDEAS home Printed from https://ideas.repec.org/a/aop/jijoes/v11y2022i1p105-116.html
   My bibliography  Save this article

Application of DSTI and DTI macroprudential policy limits to the mortgage market in the Czech Republic for the year 2022

Author

Listed:
  • Ond?ej Venhoda

    (Raiffeisenbank, a.s.)

Abstract

This paper deals with selected instruments of macroprudential policy, the determinant of which is the amount of the monthly net income of the mortgage applicant. In November 2021, Czech National Bank reintroduced maximum DSTI as debt service indicators and DTI as income indicators with the view to the progress of real estate market in the Czech Republic. The paperdiscusses which of the limits will be more decisive for mortgage applicants in the conditions of rising mortgage interest rates in 2022 after the repeated increase in the base rate by the Czech National Bank. We will find out for which interest rate the DSTI or DTI is more important and which of the limits will be entirely irrelevant for almost all mortgage applicants in 2022, even with regard to age according to the legal conditions.

Suggested Citation

  • Ond?ej Venhoda, 2022. "Application of DSTI and DTI macroprudential policy limits to the mortgage market in the Czech Republic for the year 2022," International Journal of Economic Sciences, European Research Center, vol. 11(1), pages 105-116, April.
    • Handle: RePEc:aop:jijoes:v:11:y:2022:i:1:p:105-116
    as

    Download full text from publisher

    File URL: https://eurrec.org/ijoes-article-117016
    Download Restriction: no
    File URL: https://eurrec.org/ijoes-article-117016?download=7
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. International Monetary Fund, 2011. "Macroprudential Policy: What Instruments and How to Use them? Lessons From Country Experiences," IMF Working Papers 2011/238, International Monetary Fund.
    2. Klára Čermáková & Eduard Hromada, 2022. "Change in the Affordability of Owner-Occupied Housing in the Context of Rising Energy Prices," Energies, MDPI, vol. 15(4), pages 1-18, February.
    3. Ms. Deniz O Igan & Mr. Heedon Kang, 2011. "Do Loan-To-Value and Debt-To-Income Limits Work? Evidence From Korea," IMF Working Papers 2011/297, International Monetary Fund.
    4. Zohair Alam & Mr. Adrian Alter & Jesse Eiseman & Mr. Gaston Gelos & Mr. Heedon Kang & Mr. Machiko Narita & Erlend Nier & Naixi Wang, 2019. "Digging Deeper--Evidence on the Effects of Macroprudential Policies from a New Database," IMF Working Papers 2019/066, International Monetary Fund.
    5. Carreras, Oriol & Davis, E. Philip & Piggott, Rebecca, 2018. "Assessing macroprudential tools in OECD countries within a cointegration framework," Journal of Financial Stability, Elsevier, vol. 37(C), pages 112-130.
    6. M. Dietsch & C. Welter-Nicol, 2014. "Do LTV and DSTI caps make banks more resilient?," Débats économiques et financiers 13, Banque de France.
    7. Eduard Hromada & Klara Cermakova, 2021. "Financial Unavailability Of Housing In The Czech Republic And Recommendations For Its Solution," International Journal of Economic Sciences, European Research Center, vol. 10(2), pages 47-57, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. João Fragoso Januário & Carlos Oliveira Cruz, 2023. "The Impact of the 2008 Financial Crisis on Lisbon’s Housing Prices," JRFM, MDPI, vol. 16(1), pages 1-18, January.
    2. Shangfa Hou & Jiaying Wang & Degui Zhu, 2022. "Has the Newly Imposed Property Tax Controlled Housing Prices? An Analysis of China’s 2009–2020 Interprovincial Panel Data," Sustainability, MDPI, vol. 14(22), pages 1-18, November.
    3. KADEŘÁBKOVÁ Božena & BEDNÁŘ Ondřej, 2022. "How Much Can the Monetary Policies of Small Open Economies Neighbouring the Eurozone Be Independent?," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 02, June.
    4. Raul-Tomas Mora-Garcia & Maria-Francisca Cespedes-Lopez & V. Raul Perez-Sanchez, 2022. "Housing Price Prediction Using Machine Learning Algorithms in COVID-19 Times," Land, MDPI, vol. 11(11), pages 1-32, November.
    5. KRULICKÝ Tomáš & FILHO Eduardo Aguiar Henrique & HROMADA Eduard & ČERMÁKOVÁ Klára, 2022. "The Effects of Homeownership on Wealth Distribution," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 01, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Petr Polak & Lubos Komarek, 2020. "Mortgage loan regulation instruments around the world," Occasional Publications - Chapters in Edited Volumes, in: CNB Global Economic Outlook - July 2020, pages 13-19, Czech National Bank.
    2. Kang, Qiaoling & Wu, Ji & Chen, Minghua & Jeon, Bang Nam, 2021. "Do macroprudential policies affect the bank financing of firms in China? Evidence from a quantile regression approach," Journal of International Money and Finance, Elsevier, vol. 115(C).
    3. Kelly, Jane & Mazza, Elena, 2019. "Mortgage servicing burdens and LTI caps," Financial Stability Notes 13/FS/19, Central Bank of Ireland.
    4. Poghosyan, Tigran, 2020. "How effective is macroprudential policy? Evidence from lending restriction measures in EU countries," Journal of Housing Economics, Elsevier, vol. 49(C).
    5. Elien Meuleman & Rudi Vander Vennet, 2022. "Macroprudential Policy, Monetary Policy, and Euro Zone Bank Risk," International Journal of Central Banking, International Journal of Central Banking, vol. 18(4), pages 1-52, October.
    6. Malovaná, Simona & Hodula, Martin & Gric, Zuzana & Bajzík, Josef, 2023. "Macroprudential policy in central banks: Integrated or separate? Survey among academics and central bankers," Journal of Financial Stability, Elsevier, vol. 65(C).
    7. Zhong, Changbiao & Xie, Lijuan & Shi, Yu & Xu, Xiangyun, 2023. "Macro-prudential policy, its alignment with monetary policy and house price growth: A cross-country study," The Quarterly Review of Economics and Finance, Elsevier, vol. 90(C), pages 51-62.
    8. Marcin Czaplicki, 2022. "Measuring the restrictiveness of (macro)prudential policy: the case of bank capital regulation in Poland," Journal of Banking Regulation, Palgrave Macmillan, vol. 23(3), pages 322-338, September.
    9. Carpantier, Jean-Francois & Olivera, Javier & Van Kerm, Philippe, 2018. "Macroprudential policy and household wealth inequality," Journal of International Money and Finance, Elsevier, vol. 85(C), pages 262-277.
    10. Garcia Revelo, José David & Lucotte, Yannick & Pradines-Jobet, Florian, 2020. "Macroprudential and monetary policies: The need to dance the Tango in harmony," Journal of International Money and Finance, Elsevier, vol. 108(C).
    11. Victor Pontines, 2021. "The real effects of loan-to-value limits: empirical evidence from Korea," Empirical Economics, Springer, vol. 61(3), pages 1311-1350, September.
    12. Kim, Soyoung & Oh, Junbeom, 2020. "Macroeconomic effects of macroprudential policies: Evidence from LTV and DTI policies in Korea," Japan and the World Economy, Elsevier, vol. 53(C).
    13. Tiago F. A. Matos & João C. A. Teixeira & Tiago M. Dutra, 2023. "The contribution of macroprudential policies to banks' resilience: Lessons from the systemic crises and the COVID‐19 pandemic shock," International Review of Finance, International Review of Finance Ltd., vol. 23(4), pages 794-830, December.
    14. Jose David GARCIA REVELO & Yannick LUCOTTE & Florian PRADINES-JOBET, 2019. "Macroprudential and Monetary Policies : The Need to Dance the Tango in Harmony," LEO Working Papers / DR LEO 2691, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    15. Apergis, Nicholas & Aysan, Ahmet F. & Bakkar, Yassine, 2022. "Borrower- and lender-based macroprudential policies: What works best against bank systemic risk?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).
    16. Lo Duca, Marco & Hallissey, Niamh & Jurca, Pavol & Kouratzoglou, Charalampos & Lima, Diana & Pirovano, Mara & Prapiestis, Algirdas & Saldías, Martín & Tereanu, Eugen & Bartal, Mehdi & Giedraitė, Edita, 2023. "The more the merrier? Macroprudential instrument interactions and effective policy implementation," Occasional Paper Series 310, European Central Bank.
    17. Lara Coulier & Selien De Schryder, 2022. "Assessing the Effects of Borrower-Based Macroprudential Policy on Credit in the EU Using Intensity-Based Indices," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 22/1044, Ghent University, Faculty of Economics and Business Administration.
    18. Kumar, Sanjiv & Prabheesh, K.P. & Bashar, Omar, 2022. "Examining the effectiveness of macroprudential policy in India," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 91-113.
    19. Laufer, Steven & Tzur-Ilan, Nitzan, 2021. "The effect of LTV-based risk weights on house prices: Evidence from an Israeli macroprudential policy," Journal of Urban Economics, Elsevier, vol. 124(C).
    20. Singh, Bhupal, 2023. "Housing prices and macroprudential policies: Evidence from microdata," Economic Systems, Elsevier, vol. 47(1).

    More about this item

    Keywords

    Macroprudential policy; debt service to income; debt to income; loan to value; mortgage loans; real estate; Czech National Bank;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aop:jijoes:v:11:y:2022:i:1:p:105-116. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jiri Rotschedl (email available below). General contact details of provider: https://ijoes.eurrec.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.