Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/231316 
Year of Publication: 
2021
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 04/2021
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
We exploit staggered real estate transaction tax (RETT) hikes across German states to identify the effect of house price changes on mortgage credit supply. Based on approximately 33 million real estate online listings, we construct a quarterly hedonic house price index (HPI) between 2008:q1 and 2017:q4, which we instrument with state-specific RETT changes to isolate the effect on mortgage credit supply by all local German banks. First, a RETT hike by one percentage point reduces HPI by 1.2%. This effect is driven by listings in rural regions. Second, a 1% contraction of HPI induced by an increase in the RETT leads to a 1.4% decline in mortgage lending. This transmission of fiscal policy to mortgage credit supply is effective across almost the entire bank capitalization distribution.
Subjects: 
Fiscal Shocks
Real Estate Markets
Mortgage Lending
Price-to-Rentratio
JEL: 
H30
R00
R31
ISBN: 
978-3-95729-812-6
Document Type: 
Working Paper

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