Effects of borrower-based regulation on housing demand

Economic Memo - November 2022 - No. 13

Authors Rhode Nissen, Rikke; Tang-Andersen Martinello, Alessandro; Hviid, Simon Juul; Bentzen, Christian Sinding
Subject Macroprudential policy; Financial regulation; Housing finance
Type Economic Memo
Year 2022
Published 10 November 2022
Abstract icon Borrower-based regulation, influencing housing buyers’ access to credit, would have different effects depending on buyer’s demographics, wealth and location. By modelling housing buyers’ preferences and budget constraints, we find that any such regulation would push demand to suburban areas. Limits on debt-to-income ratios (DTI) would mainly affect buyers in the largest cities; however, we find that the restrictions would not affect net demand for small apartments in Copenhagen.