What drives housing prices, rent and new construction in China

Dimitrios Staikos and Wenjun Xue

International Journal of Housing Markets and Analysis, 2017, vol. 10, issue 5, 662-686

Abstract: Purpose - With this paper, the authors aim to investigate the drivers behind three of the most important aspects of the Chinese real estate market, housing prices, housing rent and new construction. At the same time, the authors perform a comprehensive empirical test of the popular 4-quadrant model by Wheaton and DiPasquale. Design/methodology/approach - In this paper, the authors utilize panel cointegration estimation methods and data from 35 Chinese metropolitan areas. Findings - The results indicate that the 4-quadrant model is well suited to explain the determinants of housing prices. However, the same is not true regarding housing rent and new construction suggesting a more complex theoretical framework may be required for a well-rounded explanation of real estate markets. Originality/value - It is the first time that panel data are used to estimate rent and new construction for China. Also, it is the first time a comprehensive test of the Wheaton and DiPasquale 4-quadrant model is performed using data from China.

Keywords: China; Housing prices; Real estate; Panel cointegration; New construction; Rent (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijhmap:ijhma-12-2016-0080

DOI: 10.1108/IJHMA-12-2016-0080

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