Prof. Ulf von Lilienfeld-Toal (Luxembourg School of Finance) has been granted substantial funding by the Luxembourg National Research Fund (FNR) for a multi-annual research project on the regulation of real estate finance.
While policies supporting home ownership enjoy rare unanimous support across the political spectrum, there is little research and evidence into the effects of such intervention and how such subsidies should be organized. The three-year project is therefore aimed at furthering understanding of government intervention in the housing market.
“Regulation of real estate finance” (REFER) will focus on three key areas:
- Externalities in the real estate market and how investors should react to these externalities in their design of investment products, mortgage products and investment decisions;
- The price impact of subsidies on the real estate market;
- Responses to different housing subsidies from the perspective of households, banks and regulators.
“This research is relevant to Luxembourg as the real estate and mortgage market is one of the most important sub-sectors of the financial industry,” explained principal investigator Prof. von Lilienfeld-Toal “Luxembourgish banks provide the backbone for a well-functioning real estate market in the country,” he added. “At the same time, the real estate market attracts active assets management.”
Experts from the Stockholm School of Economics, New York University and the Banque Centrale du Luxembourg will support the project. Judged as “innovative and exciting” by the selection panel, the proposal was rated “excellent” and approved for €697,000 in funding from the FNR through the its central programme, CORE.