Household tenure choice and housing price volatility under a binding home-purchase limit policy constraint

Jiawei Chen, Eddie Chi-Man Hui, Michael Seiler () and Hong Zhang

Journal of Housing Economics, 2018, vol. 41, issue C, 124-134

Abstract: This study establishes a dynamic search-matching model with the home ownership market and rental markets unified within a single framework, against the background of China's home-purchase limit policy. We analyze the dynamic responses of household tenure choice, housing prices and market liquidity to a demographic shock. Our results show that, although the home-purchase limit policy can inhibit housing prices in the current period, the positive shock from demographic changes immediately triggers growth in rents and eventually leads to escalation in housing prices in subsequent periods.

Keywords: Household tenure choice; Home prices; Home-purchase limit policy; Search-matching model (search for similar items in EconPapers)
JEL-codes: R20 R28 R31 R38 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:41:y:2018:i:c:p:124-134

DOI: 10.1016/j.jhe.2018.06.004

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