The impact of continuous tightening policies on China’s real estate industry

Document Type

Conference Proceeding

Publication Date

1-1-2023

Abstract

This study investigates whether China’s real estate industry is limited when facing tightening policies and the impact of government regulation on the real estate industry. We employed comprehensive indicators related to Chinese real estate from 2000 to 2019. The empirical results show that the land purchase area, social financing scale of the real estate industry, and real estate taxation negatively impact real estate prices. Further research shows that the land policy plays a dominating role in alleviating the rapid development of the real estate industry, which suggests that a centralised land policy could be beneficial for Chinese households. Consistent with empirical findings in international real estate markets, we find that social financing scale and tax policy have modest correlations with housing prices in China. The variance decomposition results show that explanatory powers of housing prices by the land area, social financing scale, and taxation are 26.8%, 5.9%, and 4.2%, respectively.

Publication Title

International Journal of Monetary Economics and Finance

First Page Number

188

Last Page Number

196

DOI

10.1504/IJMEF.2023.131891

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