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What drives housing prices, rent and new construction in China

Author

Listed:
  • Dimitrios Staikos
  • Wenjun Xue

Abstract

Purpose - With this paper, the authors aim to investigate the drivers behind three of the most important aspects of the Chinese real estate market, housing prices, housing rent and new construction. At the same time, the authors perform a comprehensive empirical test of the popular 4-quadrant model by Wheaton and DiPasquale. Design/methodology/approach - In this paper, the authors utilize panel cointegration estimation methods and data from 35 Chinese metropolitan areas. Findings - The results indicate that the 4-quadrant model is well suited to explain the determinants of housing prices. However, the same is not true regarding housing rent and new construction suggesting a more complex theoretical framework may be required for a well-rounded explanation of real estate markets. Originality/value - It is the first time that panel data are used to estimate rent and new construction for China. Also, it is the first time a comprehensive test of the Wheaton and DiPasquale 4-quadrant model is performed using data from China.

Suggested Citation

  • Dimitrios Staikos & Wenjun Xue, 2017. "What drives housing prices, rent and new construction in China," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 10(5), pages 662-686, October.
    • Handle: RePEc:eme:ijhmap:ijhma-12-2016-0080
    DOI: 10.1108/IJHMA-12-2016-0080
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    Citations

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    Cited by:

    1. Norbert Hiller & Oliver Lerbs, 2022. "Wie stark reagiert der deutsche Wohnungsbau auf steigende Kapitalmarktzinsen? [How Strongly Does German Residential Construction React to Rising Capital Market Interest Rates?]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 102(9), pages 716-723, September.
    2. Song, Zisheng & Wilhelmsson, Mats & Zalejska-Jonsson, Agnieszka, 2022. "The relationship between owner-occupied housing prices and rental housing rents: evidence from Beijing, China," Working Paper Series 22/3, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    3. Wu Guancen & Li Chen & Niu Xing & Li Ping & Tao Li, 2021. "Evolution of Relationship Between Housing and Rental Prices and Inter-Urban Differences in China Under the Context of the Simultaneous Rental and Sales Markets Policy," Real Estate Management and Valuation, Sciendo, vol. 29(3), pages 29-38, September.
    4. Panayiotis Tzeremes, 2022. "The Asymmetric Effects of Regional House Prices in the UK: New Evidence from Panel Quantile Regression Framework," Studies in Microeconomics, , vol. 10(1), pages 7-22, June.

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