Annual Conference
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Household Finance
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May 2023
A Housing Portfolio Channel of QE Transmission
We document and quantify a housing portfolio channel of quantitative easing (QE) transmission. We identify this channel using household-level and regional data from Germany. We show that QE induces households with larger initial bond holdings to rebalance more their portfolios toward housing and particularly, second homes, consistent with a buy-to-let motive. This rebalancing is stronger for higher-income and church-affiliated households, who are more exposed to tax incentives for buying-tolet, and more financially literate and bank-advised households. We also document a larger impact of QE on housing outcomes in more exposed regions, with house prices increasing more than rents and sale listings declining more than rental ones.
Keywords:
Asset Market Segmentation, Buy-to-let, Germany, Housing Returns, Household Portfolio Rebalancing, Quantitative Easing, Rental Yields.