From Uniform to Targeted: Redesigning LTV Policies through Experimental Approaches in Emerging Housing Markets

From Uniform to Targeted: Redesigning LTV Policies through Experimental Approaches in Emerging Housing Markets | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article From Uniform to Targeted: Redesigning LTV Policies through Experimental Approaches in Emerging Housing Markets ariyanto adhi Nugroho, Yunastiti Purwaningsih, Lukman Hakim, Suryanto Suryanto, and 1 more This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8971570/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This study examines whether regionally targeted Loan-to-Value (LTV) policies can better manage credit risk and housing affordability than Indonesia’s current uniform approach. Using a staggered Difference-in-Differences design with simulated policy shocks on 17 provincial panels (2012–2024). Provinces are classified into two groups: a "high-risk" group for LTV tightening (based on peak non-performing loans) and a "low-growth" group for LTV relaxation (based on severe credit contraction). Results show an asymmetric effect: LTV tightening in high-risk provinces reduces mortgage distribution by 16.3%, while relaxation in low-growth areas has limited impact. The main conclusion is that a shift from a uniform to an adaptive, regionally-differentiated LTV framework can enhance financial stability by proactively containing regional credit bubbles. This study provides a methodological blueprint for simulating macroprudential policies and offers clear evidence for Indonesian regulators to design more responsive and equitable housing market regulations. housing loan LTV pseudo policy shock DiD Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8971570","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":602261815,"identity":"0c43c0e6-7c3d-4d88-9027-5526e01838d2","order_by":0,"name":"ariyanto adhi Nugroho","email":"data:image/png;base64,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","orcid":"","institution":"Sebelas Maret University","correspondingAuthor":true,"prefix":"","firstName":"ariyanto","middleName":"adhi","lastName":"Nugroho","suffix":""},{"id":602261817,"identity":"bc53d121-5e79-46de-b28b-c7cea04b4e70","order_by":1,"name":"Yunastiti Purwaningsih","email":"","orcid":"","institution":"Sebelas Maret University","correspondingAuthor":false,"prefix":"","firstName":"Yunastiti","middleName":"","lastName":"Purwaningsih","suffix":""},{"id":602261819,"identity":"4989a21c-2cb1-405b-a4b3-5befcdf8a575","order_by":2,"name":"Lukman Hakim","email":"","orcid":"","institution":"Sebelas Maret University","correspondingAuthor":false,"prefix":"","firstName":"Lukman","middleName":"","lastName":"Hakim","suffix":""},{"id":602261820,"identity":"08258316-86f2-4fb0-b888-8caac055131c","order_by":3,"name":"Suryanto Suryanto","email":"","orcid":"","institution":"Sebelas Maret University","correspondingAuthor":false,"prefix":"","firstName":"Suryanto","middleName":"","lastName":"Suryanto","suffix":""},{"id":602261822,"identity":"e8c3b93f-2881-459e-a40c-e2446df93d6f","order_by":4,"name":"Laela Rizki Fauzia","email":"","orcid":"","institution":"Institut Agama Islam Negeri Salatiga","correspondingAuthor":false,"prefix":"","firstName":"Laela","middleName":"Rizki","lastName":"Fauzia","suffix":""}],"badges":[],"createdAt":"2026-02-25 22:38:15","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-8971570/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-8971570/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":104487469,"identity":"4d409ebe-f3ed-47af-8748-e3c565e76c64","added_by":"auto","created_at":"2026-03-12 10:42:57","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":631707,"visible":true,"origin":"","legend":"","description":"","filename":"FromUniformtoTargetedRedesigningLTVPoliciesthroughExperimentalApproachesinEmergingHousingMarkets1.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8971570/v1_covered_2a59a9c5-e540-49a9-83dd-b3ce5a5eff75.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"From Uniform to Targeted: Redesigning LTV Policies through Experimental Approaches in Emerging Housing Markets","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"housing loan, LTV, pseudo policy shock, DiD","lastPublishedDoi":"10.21203/rs.3.rs-8971570/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8971570/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis study examines whether regionally targeted Loan-to-Value (LTV) policies can better manage credit risk and housing affordability than Indonesia\u0026rsquo;s current uniform approach. Using a staggered Difference-in-Differences design with simulated policy shocks on 17 provincial panels (2012\u0026ndash;2024). Provinces are classified into two groups: a \"high-risk\" group for LTV tightening (based on peak non-performing loans) and a \"low-growth\" group for LTV relaxation (based on severe credit contraction). Results show an asymmetric effect: LTV tightening in high-risk provinces reduces mortgage distribution by 16.3%, while relaxation in low-growth areas has limited impact. The main conclusion is that a shift from a uniform to an adaptive, regionally-differentiated LTV framework can enhance financial stability by proactively containing regional credit bubbles. 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