The Impact of Housing Market Policy on House Prices in China

Mei Liu and Qing-Ping Ma ()
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Mei Liu: NingboTech University
Qing-Ping Ma: The University of Nottingham Ningbo China

Chapter Chapter 44 in Applied Economic Research and Trends, 2024, pp 793-814 from Springer

Abstract: Abstract The phenomenal growth of the housing industry in China has been accompanied by the rapid rise in house prices in the past two decades. Governments at different levels have issued various housing policies to moderate the house price increase and prevent bubbles in the housing market. This study investigates whether and how housing market policies influence house prices as policymakers intend, using monthly time-series data of house prices, policy variables, and control variables between 2004 and 2022. The policy variables include monetary, land, tax, and down payment-related policies. The regression analysis shows that suppressive housing market policies have a significant negative impact on house prices; suppressive monetary, land, and tax-related policies also individually have a significant negative impact on house prices. There are several delays between the implementation of a housing market policy and the appearance of a significant impact. The time trend represents the expectation of continuing house price increases in the past two decades and appears to be the most crucial driver. The present findings indicate that housing market policy tools have significant impacts on house prices and can be effectively used to prevent bubbles in the housing market in China.

Keywords: House price; Time trend; Monetary policy; Land price; Tax policy; Down payment (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-49105-4_44

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DOI: 10.1007/978-3-031-49105-4_44

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