HAS SECONDARY MORTGAGE MARKET PROMOTE HOUSE AFFORDABILITY? EVIDENCE FROM INDONESIA

Abstract

The advantage of secondary mortgage market establishment to decrease housing cost, theoretically, had been mentioned frequently in domestic and international research. However, research on this matter in Indonesia is still limited to narrative descriptive. This research engages sequential explanatory design by utilizing empirical evidence from financial perspective to analyse the impact of securitization to the yield spread premium from monthly data ranging from June 2017-April 2021. In quantitative phase, this research found that either securitization volume or the launch of new series of asset backed securities (ABS) significantly affects mortgage rate, contrary to aggregate mortgage volume, prepayment risk, and yield curve risk. In the qualitative phase, it is explored that the reason of securitization’s stagnation is market unreadiness.