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This paper draws on six waves of Japanese household longitudinal data (Keio Household Panel Survey, KHPS) and estimates a
conditional fixed effects logit model to investigate the effects of housing equity constraints and income shocks on own-to-own
residential moves in Japan. By looking at contemporaneous extended Loan-to-Value (ELTV) and extended...
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... Second, this research examines the effect of capital constraints on individual homebuyers' pricing decisions. While the literature indicates how capital constraint delays homeownership for young households (Bajari et al., 2013;Haurin et al., 1996;Linneman & Wachter, 1989;Seko et al., 2012), relevant studies are centered on individual households' tenure choices but are largely silent on the trading outcomes once they decide to trade. Our work adds to the literature by identifying that the capital constraints of starter home buyers distort the pricing of home purchases. ...
Capital constraints are a major obstacle that holds back cash-poor households from purchasing a home. A workaround is to compromise the housing size and quality by buying a starter home one can marginally afford first. This study aims to investigate how capital constraints distort the pricing of starter homes. In Hong Kong, the government builds subsidized starter homes, which can be resold either to any households at full market prices through the privatized submarket or to households of limited affordability at lower prices through the affordable submarket. The subsidy in the latter case comes from the equity contribution of the government. If there were no capital constraints, the price gap between the two submarkets should simply be the government’s equity. However, our empirical analysis reveals a much smaller price gap, indicating that households with limited affordability are willing to pay a starter home premium in order to relax their capital constraints. Our estimation shows that the premium is in the range of 4.5% to 6.8%, and enlarges when the housing market becomes more unaffordable. The pricing of starter homes is based not only on their quality but also on their ability to relax capital constraints.
... Seko and Sumita (2007a) studied the effectiveness of public policies in Japan and confirmed that both tax reduction and amendments in the Rental Act to overprotect borrowers resulted in residential mobility. Using their own survey in 2005, Seko et al. (2012) showed that negative income shocks and housing equity constraints explain the low residential mobility in Japan. Moreover, based on survey data conducted in Kanto region (areas surrounding Tokyo), Ishikawa and Fukushige (2015) suggested that improved access to public transportation, shopping areas, and medical facilities becomes motivations to move houses. ...
Using household survey data from the recent economically depressed period, we attempt to identify typical household characteristics by residential type and study whether households change their residence at different stages of life. We find that the general trend in residential choice is influenced by socioeconomic background. The results of a multinomial probit estimation highlight that the probability of homeownership is higher in rural areas and increases with age of household heads, financial wealth, and family size. In contrast, the probability of renting a house is higher in urban areas and among female households. Moreover, it is observed that people adjust residential size despite market imperfections. The dwelling size increases with age of household heads and declines once they reach retirement age; however, the residential mobility is low at older ages. Furthermore, there are gender differences in terms of attitudes toward downsizing residences; female households are more willing to accept downsizing than are male households.
... A falling housing price restricts the household's financial ability and reduces population mobility. It results in the so-called equity lock-in effect (Blozea & Skak, 2016;Bricker & Bucks, 2016;Chan, 2001;Engelhardt, 2003;Ferreira, Gyourko, & Tracy, 2010Foote, 2016;Han, 2010;Modestino & Dennet, 2013;Seko, Sumita, & Naoi, 2012;Sterk, 2015) Furthermore, some studies have argued that a rise in housing prices increases a household's housing equity, making it easier for households to move (Disney, Gathergood, & Henley, 2010;Kiel, 1994). According to the above-mentioned studies, the influence of the housing price on migration is positive. ...
... Among those with high initial loan-to-value ratios, the differences are even greater. Seko et al. (2012) investigate the effects of housing equity constraints and income shocks on own-to-own residential moves in Japan. By looking at contemporaneous extended loan-to-value (ELTV) and extended debt-to-income (EDTI) ratios under the recourse loan system, they find that housing equity constraints and negative income shocks significantly deter own-to-own residential moves for positive equity households. ...
A change in housing prices has a profound impact on households' housing equity and future moving decisions. While most previous studies focus on discussing the mobility lock-in effect due to housing price depreciation, revealing that there is a positive relationship between housing prices and migration, this study reexamines their relationship by using the panel cointegration method and city-level panel data for Taiwan during the 1994–2016 period. The empirical results reveal that migration and housing prices are cointegrated, and the influence of housing prices on migration is significantly positive in the long run. However, the influence of housing price changes on migration is not as significant as expected in the short run. To further examine their short-run relationships, we use quantile regression and the results show that the influence of housing price changes on migration is significantly negative below the 0.5 quantile, but it turns out to be significantly positive in the 0.9 quantile. The influence of housing price changes on migration is not significant between the 0.5 and 0.8 quantiles. We conclude that the influence of housing price changes on migration might be asymmetric in the short run.
... The third stage is about economic conditions and housing market , with a focus on the relationship between the demand and the supply of housing; i.e. market fi t or market tightness (Clark and Dieleman 2000 ), and the cost of mobility or adjustment cost (Baum and Hassan 1999 ), where residential mobility is an equilibrating factor in this allocating function of housing markets. When institutional constraints or other barriers impede residential mobility, this allocating role of housing markets is disrupted (Sumita 2010 ). ...
This volume provides visionary approaches within the multi-disciplines engaged with informal settlements covering three main themes; ‘Innovative Policies and Strategies to Informal Urbanism’; ‘Production, Operation and the Life-World of Urban Space’ and finally ‘The Dynamics of Informal Settlements’.
The book reflects multi-disciplinary experiences dealing with informality, where authors from a number of global regions present cases, practices and ideologies related to their respective context. This is elaborated through fifteen selected papers, most of which, were presented at the International conference: ARCHCAIRO 6 (the 6th International Conference), "RESPONSIVE URBANISM IN INFORMAL AREAS TOWARDS A REGIONAL AGENDA FOR HABITAT III". The conference was organized as a collaborative activity within the “Informal Urbanism Hub” of the HABITAT University Network Initiative (UNI), the Regional Office for Arab Countries, and Cairo University, aiming at reducing the gap between academia and practice.
... For instance, in the 2000's, roughly 50% of Americans changed their residences (i.e., moved to different addresses) within 5 years, whereas roughly 20% of Japanese changed their residences within 5 years (Seko, Sumita, & Naoi, 2012). There are large international differences in residential mobility (Angel, 2000;Long, 1991), and there can also be historical changes in residential mobility within a nation. ...
... For instance, Japanese corporations used to have lifetime employment. Although residential mobility has declined over the last 30 years in Japan (Seko et al., 2012), job mobility has clearly increased, as many Japanese corporations have abolished the practice of shuushin koyo, or lifetime employment. Thus job mobility is distinct from residential mobility at large and is an important aspect of mobility that deserves further investigation (see Chen, Chiu, & Chan, 2009, for the exemplary research). ...
... Thus it is necessary to consider societal-level factors as well. As discussed by Seko et al. (2012), governmental policies regarding housing loans, interest rates, as well as housing and job markets affect individuals' decisions to move or stay. An interdisciplinary investigation is required to detect various factors contributing to the development and maintenance of residential mobility norms. ...
Social and behavioral scientists have delineated a diverse array of cultural variation in thinking, feeling, and behavior. This chapter summarizes an effort to clarify the sources of cultural variation from a socioecological perspective, focusing on two key factors: residential mobility and relational mobility. Residential mobility refers to the frequency with which people change their residence, whereas relational mobility refers to the degree to which different environments afford individuals with opportunities to form new relationships and end existing ones. A review of the literature on the associations between residential mobility, relational mobility, and psychological constructs such as well-being, interpersonal relationships, and group identity is presented. Although there are many similarities between residential and relational mobility, the two are best considered as related but distinct. Finally, important future directions of research on residential and relational mobilities are summarized.
... 3 their other assets. As a result, the negative effects of housing equity constraints on residential mobility should be much more severe under the recourse loan system than under the non-recourse system (see Seko, Sumita and Naoi, 2009). When we consider the role of leverage in influencing asset prices, the well-known proposition under the non-recourse loan system is that when buyers finance the purchase of assets by borrowing, this can lead to the prices of such assets becoming more sensitive to exogenous changes in fundamentals. ...
We use Japanese prefectural-level data to analyze the relationship between borrowing patterns and house price dynamics under the recourse-loan system. Our principal finding is that in prefectures where highly leveraged homeowners are common– i.e. have high, extended loan-to-value ratios- house prices respond less to prefecture-specific shocks, such as changes in per-capita income. This finding based on the recourse-loan system is quite different from the finding under the non-recourse loan system, because under the recourse-loan system, the lock-in effect stemming from severe equity constraints is much more severe.
Hong Kong has experienced rounds of property bubble inflation and burst, underscoring heightened market volatility amidst the financialization of the world economy. Irrespective of its fame as an exemplar of laissez faire capitalism, the city's massive public housing programme consisting of public rental housing (PRH) and the Homeownership Scheme (HOS) places the Hong Kong government among the world's biggest landlords and developers. It is within such varying and heavily manipulated choice sets that residential decisions in Hong Kong are exercised. Employing the past five population censuses (by‐censuses), this paper studies the city's changing scenes of residential mobility over the period 1991–2016, juxtaposing against changes in housing and land policies and the broader socioeconomic environment. The results reveal relatively frequent moves in the 1990s, but drastic and consistent declines in the mobility rates thereafter, especially for HOS and PRH residents. Private renters, however, stayed mobile throughout the 25‐year period. Such variations in trend point towards the recent dismantling of the housing ladder with PRH and HOS being major steps in the transition from private renting to owner‐occupation. Particularly affected are the younger generations. Expectedly, recent immigrants from mainland China fare less well in the housing realm. Nevertheless, with the attainment of the permanent resident status in Hong Kong, mainlanders and local born increasingly exhibit similar patterns of residential movements.
The first part of this chapter draws on 12 waves of Japanese household longitudinal data (Keio Household Panel Survey, KHPS) and estimates a conditional fixed effects logit model to investigate the effects of housing equity constraints and income shocks on own-to-own residential moves in Japan by comparing the effects between 2004 to 2008 and 2009 to 2014. By looking at contemporaneous extended Loan-to-Value (ELTV) and extended Debt-to-Income (EDTI) ratios under the recourse-loan system, we examine whether housing equity constraints and negative income shocks have any impact on own-to-own residential moves and whether there is any difference between the two periods. Taking account of the specific nature of the recourse-loan system in Japan, we further investigate whether these effects differ between positive and negative equity households. The estimation results show that housing equity constraints and negative income shocks significantly deter own-to-own residential moves for positive equity households even in recent financial-easing periods. In the latter part of this chapter, we use Japanese prefectural-level data to analyze the relationship between borrowing patterns and house price dynamics under the recourse-loan system. Our principal finding is that, in prefectures where homeowners are highly leveraged (i.e., have high and extended loan-to-value ratios), house prices respond less sensitively than they do in prefectures where lower leveraged homeowners are common. This finding based on the recourse-loan system is quite different from the finding under the non-recourse-loan system, because under the recourse-loan system, the lock-in effect stemming from severe equity constraints is much more severe.
This chapter reviews the housing and housing finance markets in Japan and suggests directions for future policy reforms. The chapter argues that the potential benefits of market-oriented reforms for Japan’s housing finance system, private and public rental housing, and second-hand housing market are evident.
