Research on the Commercial House Price of Supply and Demand Elasticity Based on the Panel Data of China’s Four Municipalities

Yanming Lyu () and Mengxue Chen
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Yanming Lyu: Sichuan Agricultural University
Mengxue Chen: School of Sichuan Agricultural University

A chapter in Proceedings of the 23rd International Symposium on Advancement of Construction Management and Real Estate, 2021, pp 426-436 from Springer

Abstract: Abstract Based on the panel data from 2000 to 2016 of China’s four municipalities, this paper constructs a dynamic cobweb model that includes the price of real estate, per capita disposable income, interest rate, and other variables. Then, an empirical analysis of the price elasticity of China’s commercial housing supply and demand is conducted. The results show that for the supply side, the supply of residential real estate has a positive correlation with the real estate prices in the previous period and is insensitive to changes in the benchmark lending rates. For the demand side, the demand for residential real estate is positively correlated with the per capita disposable income of urban residents in the current period, and is negatively correlated with the real estate price in this period. However, the demand of residential real estate is not sensitive to price changes. This result may be due to the fact that the four municipalities are China’s economic and cultural centers. There are a large number of people are flooding into these cities. The increase in demand brought by the population boom far exceeds the decline in demand caused by rising prices. At the same time, the purchase restriction policy has played a certain role in suppressing speculative demand arising from price increases.

Keywords: Commercial housing market; Price elasticity; Dynamic cobweb model; Supply and demand balance (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/978-981-15-3977-0_32

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