## Figure 3.4.1. Macroprudential Tools Indirectly Reduce House Price Synchronicity

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**Canonical URL:** [Figure 3.4.1. Macroprudential Tools Indirectly Reduce House Price Synchronicity](https://www.imf.org/-/media/files/publications/gfsr/2018/april/chapter-3/pdf/boxfigure3-4-1.pdf)

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### Average House Price Growth and Demand-Side Macroprudential Policies
- Period examined: plus-or-minus-five quarters around tightening of demand-side macroprudential policies (MPP), with t = 0 identified as the first quarter in which demand-side MPPs were implemented within the window.
- Demand-side MPPs definition: limits on debt-service-to-income and loan-to-value (LTV) ratios.
- Total number of demand-side events: 47.
- Time axis in the figure: –5 –4 –3 –2 –1 0 1 2 3 4 5 (quarters).
- House price growth axis in the figure: –2 0 2 4 6 8 (percentage points), showing average year-over-year house price growth for:
  - High-synchronicity countries (above 50th percentile).
  - Low-synchronicity countries (at or below 50th percentile).
- Key finding:
  - On average, house prices are affected more by demand-side macroprudential policies in low-synchronicity countries.
- Synchronicity metric:
  - Based on the quasi correlation of house price gaps with the global cycle.
  - High-synchronicity classification: country average synchronicity with the global cycle is above the 50th percentile in the sample.
  - Low-synchronicity classification: at or below the 50th percentile.

### Impact of Macroprudential Measures on House Price Synchronicity (Standard deviations)
- Panel axis labels shown in the figure: –0.08 –0.04 0.00 0.04 (standard deviations).
- Estimated average effects reported are from through-the-cycle regressions.
- Statistically significant standardized coefficients are shown as solid bars at the 10 percent confidence level.
- Key findings:
  - Supply-side measures targeting bank capital and loan-specific measures, including loan-to-value limits, seem effective in reducing synchronicity with the global cycle.
  - Fiscal-based measures and supply-side (general) measures are displayed for comparison.
- Definitions of macroprudential groupings used in regressions:
  - All measures: aggregation of all tools.
  - All loans: includes demand side and supply side (loans).
  - Demand side: limits to debt-service-to-income and LTV ratios.
  - Supply side (loans): limits on credit growth, loan loss provisions, loan restrictions, and limits on foreign currency loans.
  - Supply side (capital): capital requirements, conservation buffers, the leverage ratio, and the countercyclical capital buffer.
  - Supply side (general): reserve requirements, liquidity requirements, and limits on foreign exchange positions.
  - Fiscal-based measures: taxes such as ad valorem, sellers’ and buyers’ stamp duty, or other taxes.

### Estimation sample and controls
- Sample: data for 41 countries spanning the period 1990:Q2–2016:Q4.
- Regressions control for:
  - Business cycle synchronicity.
  - Financial integration.
  - Global financial conditions.
- All regressors are lagged one quarter.
- See Annex 3.3 for more details about the macroprudential tools database and estimation details (figure note).

*Source: IMF staff estimates.*

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_Source: https://www.imf.org/-/media/files/publications/gfsr/2018/april/chapter-3/pdf/boxfigure3-4-1.pdf_