ABSTRACT

This chapter focuses on the extreme effects of rapidly rising house prices and the government's response. It shows how government policy is challenged by the interests of the real estate industry. The Chairman of the Central Bank was asked about the pressures from Parliament and the industry against the government policy. The immediate result of the government's policy was a reduction of the number of real estate loans and this, of course, had immediate effects upon the agents involved. The regulatory barriers to capital accumulation in the housing market caused a strong opposition to governmental policy from agents within the system. The demands of the protest movement to stop speculation in the housing market were not fairly represented but rather distorted by Members of Parliament. The pressures of inflation triggered by an increased money supply were closely related to the housing boom.