A Housing Portfolio Channel of QE Transmission

We document and quantify a housing portfolio channel of quantitative easing (QE) transmission. We identify this channel using household-level and regional data from Germany. We show that QE induces households with larger initial bond holdings to rebalance more their portfolios toward housing and particularly, second homes, consistent with a buy-to-let motive. This rebalancing is stronger for higher-income and church-affiliated households, who are more exposed to tax incentives for buying-tolet, and more financially literate and bank-advised households. We also document a larger impact of QE on housing outcomes in more exposed regions, with house prices increasing more than rents and sale listings declining more than rental ones.