Haste or Waste? The Role of Presale in Residential Housing

Ziyang Chen, Maggie Rong Hu, Ginger Zhe Jin and Qiyao Zhou

No 32013, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper provides the first theoretical framework and empirical evidence on housing presale policies. Constructing a novel dataset across 270 major cities in mainland China, we identify 3,179 unfinished residential projects begun between 2010 and 2019 from a government-run citizen complaint portal. Stricter presale criteria (when developers may begin presale) and stricter post-sale supervision of construction funds both predict fewer unfinished projects, but only the presale criterion slows new housing development. A back-of-the-envelope analysis suggests the current policy bundle lies inside the Pareto frontier: tightening supervision alone could cut unfinished projects by 55% without slowing development.

JEL-codes: D22 D82 H7 K23 L52 L78 (search for similar items in EconPapers)
Date: 2024-01
New Economics Papers: this item is included in nep-cna, nep-ppm and nep-ure
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