Abstract
We examine the impacts of macroprudential instruments on housing prices and transacted volume for the real estate market of six metropolitan areas in Taiwan, while cross-regionally comparing the effects of tax policy and LTV cap on housing prices in Singapore, Soul, Hong Kong, and Taipei City. There are three major empirical results. First, the property taxes on non-self-use houses in 2014 and the consolidated housing and land taxes in 2016 have significant effects on cooling off the housing market and driving house prices to fall subsequently in Taiwan's real estate market, respectively. The cooling-off effect of the property taxes is particularly significant in Taipei City. Second, the negative impact of mortgage rate among financial policies on housing prices increases with the number of houses owned by homebuyers. Third, in cross-regional comparison, the positive impact of LTV cap on housing prices is significant only in Hong Kong and Taipei City as expected; the negative impact of property tax is significant in Sigapore and Taipei City as expected, but significantly positive in Soul. We show that implementing appropriate macroprudential policies timingly helps restrain on-going speculation and irrational exuberance potential in real estate markets. Our empirical results and suggestions can help promote the formation of reasonable housing prices and shed light on sound development of the real estate market in Taiwan.