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Property Market And The Macroeconomy Of Mainland China: A Cross Region Study

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  • Wensheng Peng
  • Dickson C. Tam
  • Matthew S. Yiu

Abstract

. This paper studies the nexus between the property market and macroeconomy of China in 1998–2004, using panel data models covering 31 provinces and major cities. The estimates suggest three main conclusions. First, there seemed to be a two‐way linkage between property prices and GDP growth. Second, bank credit expansion did not seem to play an ‘accelerating’ role in property price inflation, although the latter is found to have contributed to bank credit increases in recent years. Third, property price growth may have deviated from fundamentals in coastal areas, as evidenced by a negative relationship between housing and rental prices.

Suggested Citation

  • Wensheng Peng & Dickson C. Tam & Matthew S. Yiu, 2008. "Property Market And The Macroeconomy Of Mainland China: A Cross Region Study," Pacific Economic Review, Wiley Blackwell, vol. 13(2), pages 240-258, May.
    • Handle: RePEc:bla:pacecr:v:13:y:2008:i:2:p:240-258
    DOI: 10.1111/j.1468-0106.2008.00399.x
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    Cited by:

    1. Yan Dong & Charles Ka Yui Leung & Dongliang Cai, 2012. "What Drives Fixed Asset Holding and Risk- Adjusted Performance of Corporates in China? An Empirical Analysis," International Real Estate Review, Global Social Science Institute, vol. 15(2), pages 141-164.
    2. Gary John Rangel & Jason Wei Jian Ng, 2017. "Macroeconomic Drivers of Singapore Private Residential Prices: A Markov-Switching Approach," Capital Markets Review, Malaysian Finance Association, vol. 25(2), pages 15-31.
    3. Kenneth K. Chow & Matthew S. Yiu & Charles Ka Yui Leung & Dickson C. Tam, 2008. "Does the DiPasquale-Wheaton Model Explain the House Price Dynamics in China Cities?," Working Papers 212008, Hong Kong Institute for Monetary Research.
    4. Yongheng Deng & Eric Girardin & Roselyne Joyeux & Shuping Shi, 2017. "Did bubbles migrate from the stock to the housing market in China between 2005 and 2010?," Pacific Economic Review, Wiley Blackwell, vol. 22(3), pages 276-292, August.
    5. Mei Liu & Qing-Ping Ma, 2021. "Determinants of house prices in China: a panel-corrected regression approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(1), pages 47-72, August.
    6. Huang, Daisy J. & Leung, Charles K. & Qu, Baozhi, 2015. "Do bank loans and local amenities explain Chinese urban house prices?," China Economic Review, Elsevier, vol. 34(C), pages 19-38.
    7. He Gao & Walter Timo de Vries & Minrui Zheng & Jianping Ye, 2023. "State Capacity to Influence Actor Relations within the Chinese Real Estate Market: An Analytical Framework," Land, MDPI, vol. 12(8), pages 1-18, August.
    8. Charles Ka Yui Leung, 2017. "Special issue on housing and financial stability: An introduction," Pacific Economic Review, Wiley Blackwell, vol. 22(3), pages 273-275, August.
    9. Ashvin Ahuja & Lillian Cheung & Gaofeng Han & Nathan Porter & Wenlang Zhang, 2011. "Are Housing Prices Rising Too Fast in China?," Working Papers id:3646, eSocialSciences.
    10. Xiaoping Zhou & Zhenyang Qin & Yingjie Zhang & Linyi Zhao & Yan Song, 2019. "Quantitative Estimation and Spatiotemporal Characteristic Analysis of Price Deviation in China's Housing Market," Sustainability, MDPI, vol. 11(24), pages 1-28, December.
    11. Kuang-Liang Chang & Ming-Hui Yen, 2014. "The magnitude and significance of macroeconomic variables in explaining regional housing fluctuations," Economics Bulletin, AccessEcon, vol. 34(2), pages 828-841.
    12. Gregory C. Chow & Linlin Niu, 2015. "Housing Prices in Urban China as Determined by Demand and Supply," Pacific Economic Review, Wiley Blackwell, vol. 20(1), pages 1-16, February.
    13. Xing Su & Zhu Qian, 2020. "State Intervention in Land Supply and Its Impact on Real Estate Investment in China: Evidence from Prefecture-Level Cities," Sustainability, MDPI, vol. 12(3), pages 1-15, January.
    14. Iris Claus & Les Oxley & Jie Chen & Xuehui Han, 2014. "The Evolution Of The Housing Market And Its Socioeconomic Impacts In The Post-Reform People'S Republic Of China: A Survey Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 28(4), pages 652-670, September.
    15. Huang Yiping & Wang Xun & Hua Xiuping, 2010. "What Determine China’s Inflation?," Macroeconomics Working Papers 22770, East Asian Bureau of Economic Research.
    16. Leung, Charles Ka Yui & Chow, Kenneth & Yiu, Matthew & Tam, Dickson, 2010. "House Market in Chinese Cities: Dynamic Modeling, In-Sampling Fitting and Out-of-Sample Forecasting," MPRA Paper 27367, University Library of Munich, Germany.
    17. Huang, Jialin & Rong, Zhao, 2017. "Housing boom, real estate diversification, and capital structure: Evidence from China," Emerging Markets Review, Elsevier, vol. 32(C), pages 74-95.
    18. Weizeng Sun & Siqi Zheng & David M. Geltner & Rui Wang, 2017. "The Housing Market Effects of Local Home Purchase Restrictions: Evidence from Beijing," The Journal of Real Estate Finance and Economics, Springer, vol. 55(3), pages 288-312, October.
    19. Nan-Kuang Chen & Yu-Hsi Chou & Jyh-Lin Wu, 2013. "Credit Constraint and the Asymmetric Monetary Policy Effect on House Prices," Pacific Economic Review, Wiley Blackwell, vol. 18(4), pages 431-455, October.
    20. Yuanquan Chen, 2008. "Chinese Economy and Excess Liquidity," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 16(5), pages 63-82, September.

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