Crowding out in the housing loan market: analyzing the effect of interest rates
Date
2009-10
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Abstract
This paper attempts to link declining interest rates to the crowding out phenomenon in the low-cost housing loan market. Interest rate decline is one of the causes of crowding out according to the literature. Moreover, the risk associated with serving the low-income segment might induce preference towards the middle-income group among lending institutions. The result of the regression done shows that there is no sufficient evidence to suggest that there is crowding out happening in the housing loan sector of the Philippines as an effect of a decrease in interest rates.
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Keywords
Interest rates, Housing, Housing market, Housing loan market, Interest