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Inflation-hedging properties of regional Chinese real estate market: evidence from 35 cities in China

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  • Yi Wu
  • Alan Tidwell

Abstract

The housing markets in China have been gaining considerable interest from investors, but the inflation-hedging characteristics of housing remain ambiguous. Based on Chinese city-level data, this study evaluates different inflation-hedging properties in eastern, middle and western real estate markets using panel vector autoregressive (PVAR) models. Findings suggest middle real estate markets afford the best hedging opportunities for expected inflation, which is robust considering housing market heterogeneity, financial crisis and the 2010 purchase restriction order. Moreover, hedging efficacy of anticipated inflation differs between markets with low and high supply-demand ratio.

Suggested Citation

  • Yi Wu & Alan Tidwell, 2015. "Inflation-hedging properties of regional Chinese real estate market: evidence from 35 cities in China," Applied Economics, Taylor & Francis Journals, vol. 47(60), pages 6580-6598, December.
    • Handle: RePEc:taf:applec:v:47:y:2015:i:60:p:6580-6598
    DOI: 10.1080/00036846.2015.1080811
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    References listed on IDEAS

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    1. Canova, Fabio & Ciccarelli, Matteo, 2013. "Panel Vector Autoregressive Models: A Survey," CEPR Discussion Papers 9380, C.E.P.R. Discussion Papers.
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    Cited by:

    1. 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.
    2. Wang, Xinyu & Fang, Zhuangzhi & Wang, Zhenxin, 2025. "The dual role of sentiment on housing prices in China," International Review of Economics & Finance, Elsevier, vol. 97(C).
    3. Henry Koon Nam Lee, 2021. "The Inflation Hedging Effectiveness of Residential Property-Evidence from Three Emerging Asian Markets," International Real Estate Review, Global Social Science Institute, vol. 24(2), pages 221-251.

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