Effectiveness of forbearance measures for Russian commercial banks in the current crisis

Due to the COVID-19 pandemic, real GDP of Russia is expected to fall by 4-6%. The banking industry provides liquidity to Russian business in times of hardship. On the one hand, the Bank of Russia facilitates lending opportunities for the business and subsidizes the mortgage interest rate for banks and the public in order to prevent business bankruptcies. And on the other hand, it provides liquidity to banks via REPO (repurchase agreement) auctions. Currently, there is not enough demand for REPO transactions from banks, but it might increase after other measures of support begin to be canceled. The article studies the effectiveness of current forbearance measures for Russian banks and provides an insight into the future development of the banking industry after the COVID-19 pandemic.

Policy-Driven Boom and Bust in the Housing Market: Evidence from Mongolia

This paper examines the effects of a mortgage interest rate subsidy on booms and busts in the housing market by analyzing the Housing Mortgage program in Mongolia. We find that the most recent housing boom in Mongolia occurred from the second quarter (Q2) of 2012 to first quarter (Q1) of 2014, and that the subsequent housing bust lasted 4 years. Both house-specific factors and macroeconomic variables had a significant influence on housing price dynamics. Mortgage interest rate semielasticity and real household income elasticity were estimated as −3 and 1.4, respectively. Dynamic analysis of the estimated vector error correction models suggests that the country’s policy intervention in the mortgage market—introducing an interest rate subsidy on mortgage loans for residential properties of up to 80 square meters—drove the recent housing boom in Mongolia.

Negative interest rate: Way to tackle inflationary housing prices

While housing affordability is on drop by the rising prices, specially in large cities, the young generation suffers from the pending independence as a result. Despite the significantly good industrial performance in the construction sector in Australia, reduced housing prices is still under burden by the middle mans and real estate brokers. Several socio-economic factors are indeed involved in the rising prices such as unequal wealth distribution, banking strategies, wages growth rate, mortgage interest rate, population growth, etc. which are being discussed in this article. Data had been collected from the Australian Bureau of Statistics in order to compare and analyze the effectiveness of negative interest rates on housing affordability. New financial asset classes such as cryptocurrencies had also been introduced in order to propose alternatives to the traditional investment banking which also ensures profit earning for bankers.

Housing Price, Mortgage Interest Rate and Immigration

Housing price in New Zealand has appreciated substantially after the Global Financial Crisis, resulting in an affordability problem for first home buyers. This paper studies whether changes in immigration activity and mortgage interest rate influence housing price. Empirical findings derived using VECM confirm the impact of immigration and mortgage interest rate on housing property price. Both variables explain 11.4 percent of the variation of Housing Index. An increase of 1 percent in mortgage interest rate would reduce the housing index movement by 1.44 percent whilst a 1 percent increase in immigrants would increase the housing index by 0.30 percent. In addition, about 2 percent of the short-run deviations of housing prices are adjusted towards the long-run equilibrium each month.

Evaluating Borrower's Net Yield in Long-Term Fixed Rate Mortgage Loans in Korea

The Korean government has tried to change the structure of residential mortgages in Korea from the short-term variable-rate non-amorting loans to the long-term fixed-rate amorting loans since the early 2000’s. This study examines he borrower’s net yield from that new type of loans, which is defined as the difference between the lender’s yield out of the borrower’s repayment and the borrower’s yield from the expected gain on the portion of housing equity funded by cosnumer. The main hypothesis tested is that the borrower’s net yield will be affected by the time of loan origination and the level of mortgage interest rate charged because the future fluctuations of housing values and that of market interest rates are expected to be key determinants. The results confirm the hypothesis in that borrower’s net yields show positive or negative values according to the time of loan start, the level of fixed loan rates, or home regions. The results documented can offer a useful information as to the financial consumers’decision on loan amount and the timing of loan application considering the housing and mortgage market condition, which in turn can provide policy implication to regulating the maximum loan-to-value (LTV) ratio regulations.

Simulasi Penghitungan Online Kredit Pemilikan Rumah Bank Xyz Berbasis Web di Portal Finansial www.kontan.co.id

The objective of this study is to develop an online application of mortgage loan simulation. This application is developed based on a web application in order to be accessible anywhere and anytime. This application is expected to help prospective property’s consumers calculate their financial plans related to decisions concerning the amount of down payment, loan term, and the mortgage system model to be selected. There are two models of mortgage in this application. The first is a fixed and cap rate of interest, with the first three years of the mortgage interest rate of 9.75%, the fourth and fifth year interest of 10%, and the sixth year onwards using a rate cap interest with the indication of 12%. The second model is a 2-year fixed rate mortgage with the first two years rate of 8.5% and the third year onwards using adjustable rate mortgage of interest with the indication of 12%. Calculation formula and the interest rates in this application are obtained from Bank XYZ which is in turn applied in collaboration with financial portal www.kontan.co.id. This application has been tested by over 1000 users and the results are well proven and valid.