Analyzing Impact of Regulatory Policies on Apartment Sales Returns and Spillover Effects

In this paper, I delve into the impact of real estate regulatory policies on the transmission effect of apartment price returns, by employing the volatility transmission index proposed by Diebold & Yilmaz. I structure the analysis across three sub-periods, namely the pre-regulation period, regulation period, and deregulation period, in order to examine the spillover effects of real estate regulatory policies. The results of the empirical analysis are as follows. First, metropolitan areas exhibit a more pronounced transition phenomenon compared to non-metropolitan areas. Second, there is no significant difference in information spillovers between the pre-regulation and post-regulation periods. However, post-regulation, the influence of the market driving pre-regulation information spillovers diminishes, giving way to other neighboring regions. Third, during the deregulated period, the influence of the market that played a leading role in the regulated period experiences a resurgence in strength.