Bubbles in China’s Housing Market

Jiayu Shang () and Sheue-Li Ong ()
Additional contact information
Jiayu Shang: University of Malaya
Sheue-Li Ong: University of Malaya

International Real Estate Review, 2023, vol. 26, issue 3, 393-420

Abstract: The housing market in China has been booming since the housing reform in the 1990s. This has raised concerns around the world that the Chinese housing market is a bubble about to burst, particularly after the 2008 Global Financial Crisis which was triggered by a housing bubble burst. After implementing a number of empirical methods with panel data that cover 30 provinces/municipalities from 2002 to 2020, the results show that house price is cointegrated with the relevant market fundamentals in the long run. At the same time, short-run fluctuations and deviations in house prices from market fundamentals also exist. The estimation results identify two distinct features of the housing bubble. The first feature is that there are two obvious bubble periods. The first bubble period is from 2009 to 2013 and the second bubble period is from 2017 to 2020. The second feature is that the size of the bubble varies among the different regions. The largest bubble occurred in Hainan province in 2010, which is as large as 40% of the equilibrium value determined by market fundamentals. As for the national average, the largest bubble is also recorded in 2010, the size of which is 11% of the equilibrium value determined by market fundamentals.

Keywords: Housing bubble; Fundamentals; Provincial data; Chinese housing market (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.gssinst.org/irer/wp-content/uploads/202 ... a-Housing-Market.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ire:issued:v:26:n:03:2023:p:393-420

Ordering information: This journal article can be ordered from
Global Social Science Institute, 9200 Corporate Blvd., Suite 420 Rockville, MD 20850
https://www.gssinst.org/gssinst/index.html

Access Statistics for this article

International Real Estate Review is currently edited by Professor Sing Tien Foo and Professor Ko Wang

More articles in International Real Estate Review from Global Social Science Institute Global Social Science Institute, 9200 Corporate Blvd., Suite 420 Rockville, MD 20850.
Bibliographic data for series maintained by IRER Graduate Assistant/Webmaster ().