Housing,Purchase And Loan Restriction And Household Financial Asset Allocation

Housing and financial assets are the two key points of household asset allocation in our country.Relationship between the two not only affects the living standards of households,but also relates to the healthy development of financial and real estate markets.However,current household asset allocation in our country has the problems of too high proportion of real estate and less participation in financial assets.In addition,in the past ten years,as the property market has soared and the risk of a housing price bubble has accumulated,the government has begun to intensively introduce control policies to cool down housing prices and residents’ enthusiasm for buying houses.As the policy took effect,house prices began to stabilize.Therefore,the rate of return on real estate and the attractiveness of housing investment gradually decreased.In this context,this paper analyzes the relationship between household ownership and the number of houses and investment decisions of risky financial assets such as stocks by collating and empirical analysis of the 2015 and 2017 data of the China Household Finance Survey,also the impact of the purchase and loan restriction introduced in 2016 on the participation of risky financial assets.This paper has the following findings:First of all,the first house of a family does not have a significant impact on the investment decision of risky assets such as stocks.Household with multiple suites are more inclined to invest in risky financial assets.Secondly,the positive impact of multiple houses on risk financial asset investment is heterogeneous in different families.Specifically,it is more significant in the short-term after the family just buys a house,and gradually weakens over time;this effect varies in different age groups,and most significant for middle-aged heads of households;mortgage loans will strengthen this positive impact due to smooth consumption and leverage;in addition,the more risk appetite the household is,the greater the role of multiple houses in promoting the participation of household risk financial assets.Finally,the purchase and loan restriction policy has a negative impact on family’s stocks and other risky financial assets investment by restraining family’s holdings of multiple houses.The main contribution is to consider the impact of housing policy on the participation in risky financial assets,and distinguish between the first and multiple houses when analyse the impact of housing.