Examining the integration of real estate into financial assets: A critical analysis of China's regulatory framework for nonreal estate corporations

Liangzhu Sun, Xingdong Wang, Yigen Wu and Zhen Zeng

Finance Research Letters, 2024, vol. 67, issue PA

Abstract: This study explores the integration of real estate into financial assets within the context of China's regulatory framework for nonreal estate corporate listed companies (NRELCs). The purpose is to assess the impact of NRELCs’ involvement in the real estate market on housing prices as influenced by monetary policy. The need for a solution is driven by the significant role of real estate in China's economic strategy and the challenges posed by speculative investments. Utilizing a mixed-method approach, this study employs empirical models to analyze data from 2007 to 2018. The key findings indicate that NRELCs’ entry into the real estate market significantly stimulates housing prices, with monetary policy acting as a critical driver. The interaction between credit expansion and NRELCs’ real estate activities exacerbates price fluctuations. Our findings highlight the necessity of controlling the financial attributes of real estate and suggest regulatory measures to curb speculative demand. The potential impact includes informing policy decisions to stabilize the housing market and promote sustainable economic growth.

Keywords: Credit scale; House price; Financial attributes; Nonreal estate listed companies (search for similar items in EconPapers)
JEL-codes: B22 B23 C12 E31 E52 G12 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:67:y:2024:i:pa:s1544612324008614

DOI: 10.1016/j.frl.2024.105831

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