Housing wealth effects in China

Benoit Mojon, Han Qiu, Fang Wang and Michael Weber

No 1319, BIS Working Papers from Bank for International Settlements

Abstract: We estimate the effects of changes in house prices on consumption using unique data of Alipay transactions from Chinese households, spanning from January 2017 to March 2023. We find significant housing wealth effects: changes in house prices are positively associated with future changes in consumption in 33 Tier 1 and Tier 2 cities. Specifically, in these cities, a 10% increase in house prices leads to a 1.6% increase in consumption. However, this relationship is not observed in smaller Tier 3 and Tier 4 cities. We also find that housing wealth effects are more pronounced among older households and homeowners, while renters show no such effect. Additionally, in Tier 3 and Tier 4 cities, higher house prices tend to crowd out consumption among younger households.

Keywords: consumption; house prices; savings (search for similar items in EconPapers)
JEL-codes: R2 R3 (search for similar items in EconPapers)
Date: 2025-12
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