Credit Tightening and Housing Prices: Empirical Research on the Channel of the Housing Supply Side

Bingtao Zhang and Xiaoli Wan ()
Additional contact information
Bingtao Zhang: Jiangxi University of Finance and Economics
Xiaoli Wan: Southwestern University of Finance and Economics

The Journal of Real Estate Finance and Economics, 2025, vol. 71, issue 4, No 3, 615-641

Abstract: Abstract Little is known about how credit affects housing prices from the housing supply side. The Chinese government has implemented a differential credit tightening policy for the real estate sector since Q3 2020, providing a quasi-natural experiment for answering this question. Using the data of 1275 housing projects from Q3 2019 to Q3 2021, we find that the policy has reduced the prices of housing projects by 5.5% and that this result has hardly changed after addressing the problem of sample incomparability and sample grouping. The negative impact is more pronounced for the heavily regulated developers and private-owned developers, advancing the understanding of the basic result. Further investigations show the policy has indeed restricted developers’ debt financing and deteriorated their liquidity but has not suppressed the housing demand statistically. Consequently, this paper proves a supply-side channel of credit’s impact on housing prices.

Keywords: Housing prices; Credit; Fire sale; Real estate developers (search for similar items in EconPapers)
JEL-codes: D22 G38 R31 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11146-023-09974-9 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:jrefec:v:71:y:2025:i:4:d:10.1007_s11146-023-09974-9

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11146/PS2

DOI: 10.1007/s11146-023-09974-9

Access Statistics for this article

The Journal of Real Estate Finance and Economics is currently edited by Steven R. Grenadier, James B. Kau and C.F. Sirmans

More articles in The Journal of Real Estate Finance and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().