 Epidemic shocks and housing price responses: Evidence from China's urban residential communitiesYanan Liu and Yugang Tang Regional Science and Urban Economics, 2021, vol. 89, issue C Abstract: This paper evaluates the impact of the COVID-19 epidemic on the real estate market using a community-level panel dataset of 34 major cities in China. We find that the average housing price in communities with COVID-19 infections decreases by approximately 1.3% compared to communities with no confirmed cases. The economic implication is that homebuyers are willing to pay a premium equivalent to approximately 1.3% of the average housing price to avoid health risks. The response of real estate markets to epidemic shocks is heterogeneous in community and city characteristics. Dynamic analysis shows that the declines in home prices, transaction volumes, and rents are all short-lived, returning to their original development paths a few months after the epidemic shock. Public interventions such as community closures and quarantines may have contributed to the rapid recovery of the housing market, reducing the volatility of housing assets in the household sector. Keywords: COVID-19; Housing price; Rental price; Negative externality; Public intervention (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:89:y:2021:i:c:s0166046221000557 DOI: 10.1016/j.regsciurbeco.2021.103695 Access Statistics for this article Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou More articles in Regional Science and Urban Economics from Elsevier |
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