IDEAS home Printed from
   My bibliography  Save this article

Determinants of house prices in China: a panel-corrected regression approach


  • Mei Liu

    (NingboTech University)

  • Qing-Ping Ma

    (The University of Nottingham Ningbo China)


This paper uses annual data from 31 provinces, municipalities and autonomous regions in China from 2000 to 2018 to examine the determinants of Chinese house prices with a panel data regression method. Our finding suggests that land price, loans of real estate developers, per capita saving and the proportion of people with college or above educational degrees significantly drive up house prices, while the number of unemployed population has a significant negative impact. These five variables account for 72 percent variations in house prices across the country. Other economic fundamentals such as inflation, interest rate, per capita gross domestic products (GDP), and rent cost do not have significant influences on house prices. The econometric model is then used to assess the existence of house price bubbles in those provincial-level divisions in China by comparing their actual price levels with those predicted by the model. If the trend of house price growth during 2002–2014 found in the present study is the true long-run trend of house prices in China, with a few exceptions, the house prices in most provincial-level divisions are not overvalued by the end of 2014.

Suggested Citation

  • 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.
  • Handle: RePEc:spr:anresc:v:67:y:2021:i:1:d:10.1007_s00168-020-01040-z
    DOI: 10.1007/s00168-020-01040-z

    Download full text from publisher

    File URL:
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL:
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Zan Yang & Ying Fan & Liqing Zhao, 2018. "A Reexamination of Housing Price and Household Consumption in China: The Dual Role of Housing Consumption and Housing Investment," The Journal of Real Estate Finance and Economics, Springer, vol. 56(3), pages 472-499, April.
    2. Sainan Jin & Wanjun Jiang & Liangjun Su & Jianying Hu, 2006. "The Rise in House Prices in China: Bubbles or Fundamentals?," Economics Bulletin, AccessEcon, vol. 3(7), pages 1-8.
    3. Du, Hongyan & Ma, Yongkai & An, Yunbi, 2011. "The impact of land policy on the relation between housing and land prices: Evidence from China," The Quarterly Review of Economics and Finance, Elsevier, vol. 51(1), pages 19-27, February.
    4. Gaia Garino & Lucio Sarno, 2004. "Speculative Bubbles in U.K. House Prices: Some New Evidence," Southern Economic Journal, John Wiley & Sons, vol. 70(4), pages 777-795, April.
    5. Renhe Liu & Eddie Chi-man Hui & Jiaqi Lv & Yi Chen, 2017. "What Drives Housing Markets: Fundamentals or Bubbles?," The Journal of Real Estate Finance and Economics, Springer, vol. 55(4), pages 395-415, November.
    6. Wang, Songtao & Yang, Zan & Liu, Hongyu, 2011. "Impact of urban economic openness on real estate prices: Evidence from thirty-five cities in China," China Economic Review, Elsevier, vol. 22(1), pages 42-54, March.
    7. Theodore Panagiotidis & Panagiotis Printzis, 2016. "On the macroeconomic determinants of the housing market in Greece: a VECM approach," International Economics and Economic Policy, Springer, vol. 13(3), pages 387-409, July.
    8. Mr. Ashvin Ahuja & Lillian Cheung & Gaofeng Han & Mr. Nathan Porter & Wenlang Zhang, 2010. "Are House Prices Rising Too Fast in China?," IMF Working Papers 2010/274, International Monetary Fund.
    9. John M. Quigley, 1999. "Real Estate Prices and Economic Cycles," International Real Estate Review, Global Social Science Institute, vol. 2(1), pages 1-20.
    10. Wu, Jing & Gyourko, Joseph & Deng, Yongheng, 2012. "Evaluating conditions in major Chinese housing markets," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 531-543.
    11. Wu, Guiying Laura & Feng, Qu & Li, Pei, 2015. "Does local governments’ budget deficit push up housing prices in China?," China Economic Review, Elsevier, vol. 35(C), pages 183-196.
    12. Anna Pavlova & Roberto Rigobon, 2007. "Asset Prices and Exchange Rates," Review of Financial Studies, Society for Financial Studies, vol. 20(4), pages 1139-1180.
    13. Ashvin Ahuja & Lillian Cheung & Gaofeng Han & Nathan Porter & Wenlang Zhang, 2010. "Are House Prices Rising Too Fast in China?," Working Papers 1008, Hong Kong Monetary Authority.
    14. Mr. Calvin Schnure, 2005. "Boom-Bust Cycles in Housing: The Changing Role of Financial Structure," IMF Working Papers 2005/200, International Monetary Fund.
    15. N. Kundan Kishor & Hardik A. Marfatia, 2017. "The Dynamic Relationship Between Housing Prices and the Macroeconomy: Evidence from OECD Countries," The Journal of Real Estate Finance and Economics, Springer, vol. 54(2), pages 237-268, February.
    16. Nils Jannsen, 2010. "National and International Business Cycle Effects of Housing Crises," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 56(2), pages 175-206.
    17. Michael J. Potepan, 1996. "Explaining Intermetropolitan Variation in Housing Prices, Rents and Land Prices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 24(2), pages 219-245.
    18. Zhang, Yanbing & Hua, Xiuping & Zhao, Liang, 2012. "Exploring determinants of housing prices: A case study of Chinese experience in 1999–2010," Economic Modelling, Elsevier, vol. 29(6), pages 2349-2361.
    19. Dean Hanink & Robert Cromley & Avraham Ebenstein, 2012. "Spatial Variation in the Determinants of House Prices and Apartment Rents in China," The Journal of Real Estate Finance and Economics, Springer, vol. 45(2), pages 347-363, August.
    20. Jie Chen & Lan Deng, 2014. "Financing Affordable Housing Through Compulsory Saving: The Two-Decade Experience of Housing Provident Fund in China," Housing Studies, Taylor & Francis Journals, vol. 29(7), pages 937-958, October.
    21. Huayi Yu, 2010. "China’s House Price: Affected by Economic Fundamentals or Real Estate Policy?," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 5(1), pages 25-51, March.
    22. Eden Hatzvi & Glenn Otto, 2008. "Prices, Rents and Rational Speculative Bubbles in the Sydney Housing Market," The Economic Record, The Economic Society of Australia, vol. 84(267), pages 405-420, December.
    23. repec:ebl:ecbull:v:3:y:2006:i:7:p:1-8 is not listed on IDEAS
    24. Zhang, Dingsheng & Cheng, Wenli & Ng, Yew-Kwang, 2013. "Increasing returns, land use controls and housing prices in China," Economic Modelling, Elsevier, vol. 31(C), pages 789-795.
    25. Mankiw, N. Gregory & Weil, David N., 1989. "The baby boom, the baby bust, and the housing market," Regional Science and Urban Economics, Elsevier, vol. 19(2), pages 235-258, May.
    26. Christian Dreger & Yanqun Zhang, 2010. "Is There a Bubble in the Chinese Housing Market?," Discussion Papers of DIW Berlin 1081, DIW Berlin, German Institute for Economic Research.
    27. Fuerst, Franz & McAllister, Patrick & Nanda, Anupam & Wyatt, Peter, 2015. "Does energy efficiency matter to home-buyers? An investigation of EPC ratings and transaction prices in England," Energy Economics, Elsevier, vol. 48(C), pages 145-156.
    28. Shen, Ling, 2012. "Are house prices too high in China?," China Economic Review, Elsevier, vol. 23(4), pages 1206-1210.
    29. Dennis R. Capozza & Patric H. Hendershott & Charlotte Mack & Christopher J. Mayer, 2002. "Determinants of Real House Price Dynamics," NBER Working Papers 9262, National Bureau of Economic Research, Inc.
    30. Dennis R. Capozza & Charlotte Mack & Patric H. Hendershott & Christopher J. Mayer, 2002. "The Determinants of House Price Dynamics," ERES eres2002_106, European Real Estate Society (ERES).
    31. 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.
    32. Yongzhou Hou, 2010. "Housing price bubbles in Beijing and Shanghai?," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 3(1), pages 17-37, March.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Yaşar Reha Z. & Bulut Erdem, 2023. "Why Did Housing Prices Rise to a Record Level in Turkey? An Empirical Analysis," Real Estate Management and Valuation, Sciendo, vol. 31(4), pages 1-10, December.
    2. Wenhao Xue & Xinyao Li & Zhe Yang & Jing Wei, 2022. "Are House Prices Affected by PM 2.5 Pollution? Evidence from Beijing, China," IJERPH, MDPI, vol. 19(14), pages 1-17, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Victor Jing & Cheng, Andy Wui Wing & Cheong, Tsun Se, 2017. "Home purchase restriction and housing price: A distribution dynamics analysis," Regional Science and Urban Economics, Elsevier, vol. 67(C), pages 1-10.
    2. Deng, Yongheng & Girardin, Eric & Joyeux, Roselyne, 2018. "Fundamentals and the volatility of real estate prices in China: A sequential modelling strategy," China Economic Review, Elsevier, vol. 48(C), pages 205-222.
    3. 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.
    4. Wu, Jing & Gyourko, Joseph & Deng, Yongheng, 2016. "Evaluating the risk of Chinese housing markets: What we know and what we need to know," China Economic Review, Elsevier, vol. 39(C), pages 91-114.
    5. Zhang, Yanbing & Hua, Xiuping & Zhao, Liang, 2012. "Exploring determinants of housing prices: A case study of Chinese experience in 1999–2010," Economic Modelling, Elsevier, vol. 29(6), pages 2349-2361.
    6. Tommaso Gabrieli & Keith Pilbeam & Tianyu Wang, 2018. "Estimation of bubble dynamics in the Chinese real estate market: a State space model," International Economics and Economic Policy, Springer, vol. 15(2), pages 483-499, April.
    7. Yongheng Deng & Eric Girardin & Roselyne Joyeux, 2015. "Fundamentals and the Volatility of Real Estate Prices in China: A Sequential Modelling Strategy," Working Papers 222015, Hong Kong Institute for Monetary Research.
    8. Ng, Eric C.Y., 2015. "Housing market dynamics in China: Findings from an estimated DSGE model," Journal of Housing Economics, Elsevier, vol. 29(C), pages 26-40.
    9. 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.
    10. Wen, Xing-Chun & He, Ling-Yun, 2015. "Housing demand or money supply? A new Keynesian dynamic stochastic general equilibrium model on China’s housing market fluctuations," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 432(C), pages 257-268.
    11. Bian, Timothy Yang & Gete, Pedro, 2015. "What drives housing dynamics in China? A sign restrictions VAR approach," Journal of Macroeconomics, Elsevier, vol. 46(C), pages 96-112.
    12. 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.
    13. Feng, Qu & Wu, Guiying Laura, 2015. "Bubble or riddle? An asset-pricing approach evaluation on China's housing market," Economic Modelling, Elsevier, vol. 46(C), pages 376-383.
    14. Yii, Kwang-Jing & Tan, Chai-Thing & Ho, Wing-Ken & Kwan, Xiao-Hui & Nerissa, Feng-Ting Shim & Tan, Yan-Yi & Wong, Kar-Horn, 2022. "Land availability and housing price in China: Empirical evidence from nonlinear autoregressive distributed lag (NARDL)," Land Use Policy, Elsevier, vol. 113(C).
    15. Tripathi, Sabyasachi, 2019. "Macroeconomic Determinants of Housing Prices: A Cross Country Level Analysis," MPRA Paper 98089, University Library of Munich, Germany.
    16. Yip Chee Yin & Woo Kok Hoong & Oon Kam Hoe & Nabihah Binti Aminaddin & Nurfadhilah Binti Abu Hasan, 2017. "Boom-Bust Housing Price Dynamic: The Case of Malaysia," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 132-138.
    17. repec:wyi:journl:002167 is not listed on IDEAS
    18. Jing Wu & Yongheng Deng & Hongyu Liu, 2014. "House Price Index Construction in the Nascent Housing Market: The Case of China," The Journal of Real Estate Finance and Economics, Springer, vol. 48(3), pages 522-545, April.
    19. I-Chun Tsai, 2017. "The housing market and excess monetary liquidity in China," Empirical Economics, Springer, vol. 53(2), pages 599-615, September.
    20. Mao, Guangyu & Shen, Yan, 2019. "Bubbles or fundamentals? Modeling provincial house prices in China allowing for cross-sectional dependence," China Economic Review, Elsevier, vol. 53(C), pages 53-64.
    21. I-Chun Tsai & Shu-Hen Chiang, 2018. "Risk Transfer among Housing Markets in Major Cities in China," Sustainability, MDPI, vol. 10(7), pages 1-20, July.

    More about this item

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:anresc:v:67:y:2021:i:1:d:10.1007_s00168-020-01040-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.