A1077
Title: An analysis of increased mortgage interest rates on the housing market in Germany using the BSTS Model
Authors: Chong Dae Kim - TH Koeln (Technische Hochschule Koeln) (Germany) [presenting]
Abstract: The short-term impact of the Ukrainian refugee crisis on the Polish rental housing market was discussed using the BSTS model. In Germany, the housing market benefited from low mortgage interest rates for a long period of time. The BSTS model is used because of the advantages already explained. The increase in the mortgage interest rates represents the intervention which can be located in spring 2022. Thus, the post-intervention period extends over three quarters. Since the effects of the increased mortgage interest rates on the housing market appear only after a certain period of time, the research question is whether these causal effects can be proven with the BSTS model over a limited period of time. The application of the BSTS model yields results on whether the impact of the increased mortgage interest rates on the housing market is statistically significant. Firstly, these results serve to discuss possible limitations of the model because of the limited time series. These limitations provide information on how soon, after an intervention, an analysis can be carried out using this model. Early conclusions about the causal effects of an intervention on the market allow for swift responses. Subsequently, if the causal effects of increased mortgage interest rates can actually be proven, the results also serve to validate this assumption by a mathematical model.
