The relationship between owner-occupied housing prices and rental housing rents: evidence from Beijing, China

Zisheng Song (), Mats Wilhelmsson and Agnieszka Zalejska-Jonsson ()
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Zisheng Song: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Teknikringen 10B, 100 44 Stockholm, Sweden
Agnieszka Zalejska-Jonsson: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Teknikringen 10B, 100 44 Stockholm, Sweden

No 22/3, Working Paper Series from Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance

Abstract: The relationship between housing prices or rents with other economic factors has been widely analysed. However, few studies use cross-sectional data to analyse the relationship between owner-occupied and rental housing sectors. This paper aims to develop a cross-sectional rent-price model and estimate the interconnected relationship between different market segments. Based on the transactional data of owner-occupied and rental housing in 2015–2018 in Beijing, China, we empirically conduct analyses of cross-sectional rent-price interconnectivity in total housing markets and segments such as housing size and school district. As expected, we find a bi-directional relationship between prices and rents in Beijing that goes in both directions, indicating that housing of different tenures substitute each other, and substitutional effects are significantly different across submarkets. Condominium prices have a more significant impact on rents than vice versa.

Keywords: rents; owner-occupied housing prices; housing subsectors’ relationship (search for similar items in EconPapers)
JEL-codes: C21 C51 C52 R32 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2022-05-11
New Economics Papers: this item is included in nep-cna and nep-ure
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