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Do bank loans and local amenities explain Chinese urban house prices?

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  • Huang, Daisy J.
  • Leung, Charles K.
  • Qu, Baozhi

Abstract

Based on Chinese city-level data from 1999 to 2012 and controlling for geological, environmental, and social diversity, our multi-step estimation suggests that credit plays a significant role in driving up house prices after the Great Recession, whereas property prices only influence bank lending before 2008. Local amenities such as higher education, green infrastructure, healthcare, and climate also positively affect house prices. Moreover, the impacts of bank loans on housing prices tend to be related to the level of amenities, suggesting that pooling macroeconomic and urban economic data may be important for housing market research in the future.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:chieco:v:34:y:2015:i:c:p:19-38
    DOI: 10.1016/j.chieco.2015.03.002
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    More about this item

    Keywords

    City-level house price dynamics; Endogenous income and endogenous amenities; Bank loans and monetary policy; Multicollinearity; Clustered standard errors;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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