Impact of Covid-19 Vaccination and Financial Policies on Indonesia’s Property Loan Growth

Veniola Forestryani, Dedy Dwi Prastyo

Abstract


Research Originality: This study provides a novel examination of the impact of COVID-19-related financial policies on property loan growth in Indonesia, a critical area with limited prior quantitative research.

Research Objectives: The purpose of this research is to assess how interventions such as Loan-to-Value (LTV) over Finance-to-Value (FTV) ratio (LTV/FTV) relaxation, COVID-19 vaccination as a metric for public activity restrictions, and changes in deposit insurance rates have influenced property loan dynamics during the pandemic.

Research Methods: Using monthly banking data from January 2016 to May 2022, this study employs ARIMA Intervention Analysis to capture the effects of these policies.

Empirical Results: The empirical results reveal a significant positive shift in property loan growth ten months after the first intervention and a notable impact two months after the third intervention, whereas the second intervention shows limited influence.

Implications: These findings imply that integrating COVID-19 vaccination targets into public policy and adjusting deposit insurance rates are effective strategies for sustaining the property loan sector during economic crises. These results provide insights into the role of vaccination targets and financial adjustments in supporting the property loan sector during economic disruptions, offering valuable considerations for future policymaking in similar contexts.

JEL Classification: C22, C51, C52, C53, C54

 

 


Keywords


property loans; loan to value; deposit insurance rate; COVID-19 vaccination

References


Ardiyono, S. K., & Patunru, A. A. (2023). Firms’ Responses to Foreign Demand Shocks: Evidence from Indonesia After the Global Financial Crisis. Economic Modelling, 128, 106493. https://doi.org/10.1016/j.econmod.2023.106493.

Ayuningtyas, D., Haq, H. U., Utami, R. R. M., & Susilia, S. (2021). Requestioning the Indonesia Government’s Public Policy Response to the COVID-19 Pandemic: Black Box Analysis for the Period of January–July 2020. Frontiers in Public Health, 9. https://doi.org/10.3389/fpubh.2021.612994.

Balcilar, M., Roubaud, D., Uzuner, G., & Wohar, M. E. (2021). Housing Sector and Economic Policy Uncertainty: A GMM Panel VAR Approach. International Review of Economics & Finance, 76, 114–126. https://doi.org/10.1016/j.iref.2021.05.011.

Balemi, N., Füss, R., & Weigand, A. (2021). COVID-19’s Impact on Real Estate Markets: Review and Outlook. Financial Markets and Portfolio Management, 35(4), 495–513. https://doi.org/10.1007/s11408-021-00384-6.

Cui, W. (2023). The Impact of COVID-19 on the Real Estate Market Based on Case and Data Analysis. Advances in Economics, Management and Political Sciences, 15(1), 271–278. https://doi.org/10.54254/2754-1169/15/20230928.

Deb, P., Furceri, D., Jimenez, D., Kothari, S., Ostry, J. D., & Tawk, N. (2022). The Effects of COVID-19 Vaccines on Economic Activity. Swiss Journal of Economics and Statistics, 158(1), 3. https://doi.org/10.1186/s41937-021-00082-0.

Dorlach, T. (2023). Social Policy Responses to Covid-19 in the Global South: Evidence from 36 Countries. Social Policy and Society, 22(1), 94–105. https://doi.org/10.1017/S1474746422000264.

Fischer, M. M., Huber, F., Pfarrhofer, M., & Staufer‐Steinnocher, P. (2021). The Dynamic Impact of Monetary Policy on Regional Housing Prices in the United States. Real Estate Economics, 49(4), 1039–1068. https://doi.org/10.1111/1540-6229.12274.

Grogan, J. (2022). COVID-19, The Rule of Law and Democracy. Analysis of Legal Responses to a Global Health Crisis. Hague Journal on the Rule of Law, 14(2–3), 349–369. https://doi.org/10.1007/s40803-022-00168-8.

Lehmann, R. (2023). The Forecasting Power of the ifo Business Survey. Journal of Business Cycle Research, 19(1), 43–94. https://doi.org/10.1007/s41549-022-00079-5.

Liang, G. (2022). Reassessing the Impact of the 2008 Financial Crisis on Global Foreign Direct Investment: Empirical Evidence and Theoretical Implications. In. Van Tulder, R., Verbeke, A., Piscitello, L., & Puck, J. (Eds). International Business in Times of Crisis: Tribute Volume to Geoffrey Jones (Progress in International Business Research), 16, 341–352. Leeds: Emerald Publishing Limiteds.

Mahendradhata, Y., Lestari, T., & Djalante, R. (2022). Strengthening Government’s Response to COVID-19 in Indonesia: A Modified Delphi Study of Medical and Health Academics. PLOS ONE, 17(9), e0275153. https://doi.org/10.1371/journal.pone.0275153.

Maison, D., Jaworska, D., Adamczyk, D., & Affeltowicz, D. (2021). The Challenges Arising from the COVID-19 Pandemic and the Way People Deal with Them: A Qualitative Longitudinal Study. PLOS ONE, 16(10), e0258133. https://doi.org/10.1371/journal.pone.0258133.

Paramitha, D., Gamal, A., & Hadi, A. (2020). Loan to Value (LTV) Ratio Policy and Its Impact to Property Development. AIP Conference Proceeding, 2230, 040021. https://doi.org/10.1063/5.0002625.

Suryahadi, A., Al Izzati, R., & Yumna, A. (2021). The Impact of Covid-19 and Social Protection Programs on Poverty in Indonesia. Bulletin of Indonesian Economic Studies, 57(3), 267–296. https://doi.org/10.1080/00074918.2021.2005519.

Svobodová, L., & Hedvičáková, M. (2021). Mortgage Loans and Impacts of the Global Pandemic COVID-19 in the Globalized Society. SHS Web of Conferences, 92, 01047. https://doi.org/10.1051/shsconf/20219201047.

Warjiyo, P., & Juhro, S. M. (2022). Correction to: Central Bank Policy Mix: Issues, Challenges, and Policy Responses. In Warjiyo, P., & Juhro, S. M. (Eds). Central Bank Policy Mix: Issues, Challenges, and Policy Responses. Singapore: Springer Nature. https://doi.org/10.1007/978-981-16-6827-2_14.

Wei, W. (2019). Time Series Analysis: Univariate and Multivariate Methods (Classic Version) (2nd ed.). New Jersey: Pearson Education.

Yuda, T. K., & Qomariyah, N. (2022). Ideas and Policy Response to the COVID-19 Crisis: Evidence from Jakarta, Indonesia. Social Policy and Society, 1–20. https://doi.org/10.1017/S1474746422000616.

Zhao, C., & Liu, F. (2023). Impact of Housing Policies on the Real Estate Market - Systematic Literature Review. Heliyon, 9(10), e20704. https://doi.org/10.1016/j.heliyon.2023.e20704.


Full Text: PDF

DOI: 10.15408/sjie.v13i1.37419

Refbacks

  • There are currently no refbacks.