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Haste or Waste? The Role of Presale in Residential Housing

Author

Listed:
  • Ziyang Chen
  • Maggie Rong Hu
  • Ginger Zhe Jin
  • Qiyao Zhou

Abstract

This paper provides the first theoretical framework and empirical evidence on housing presale policies. Constructing a novel dataset across 270 major cities in mainland China, we identify 3,179 unfinished residential projects begun between 2010 and 2019 from a government-run citizen complaint portal. Stricter presale criteria (when developers may begin presale) and stricter post-sale supervision of construction funds both predict fewer unfinished projects, but only the presale criterion slows new housing development. A back-of-the-envelope analysis suggests the current policy bundle lies inside the Pareto frontier: tightening supervision alone could cut unfinished projects by 55% without slowing development.

Suggested Citation

  • Ziyang Chen & Maggie Rong Hu & Ginger Zhe Jin & Qiyao Zhou, 2024. "Haste or Waste? The Role of Presale in Residential Housing," NBER Working Papers 32013, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32013
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    References listed on IDEAS

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    1. Alan I. Barreca & Melanie Guldi & Jason M. Lindo & Glen R. Waddell, 2011. "Saving Babies? Revisiting the effect of very low birth weight classification," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(4), pages 2117-2123.
    2. L. Li & K. W. Chau, 2019. "What Motivates a Developer to Sell before Completion?," The Journal of Real Estate Finance and Economics, Springer, vol. 59(2), pages 209-232, August.
    3. L. Li & Helen X. H. Bao & K. W. Chau, 2023. "On the Strategic Timing of Sales by Real Estate Developers: To Wait or To Presell?," The Journal of Real Estate Finance and Economics, Springer, vol. 66(1), pages 169-196, January.
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    Cited by:

    1. Martins, António Miguel & Moutinho, Nuno, 2026. "Evergrande short-term effect on Chinese listed financial institutions," International Review of Economics & Finance, Elsevier, vol. 105(C).
    2. Martins, António Miguel & Moutinho, Nuno, 2024. "The effect of the evergrande bankruptcy on Chinese real estate listed firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 98(C).
    3. Fan, Qingli & Zhou, Qiyao, 2025. "The Lavish, the wealthy, and the healthy — Effect of housing wealth on health outcomes and behaviors," Journal of Economic Behavior & Organization, Elsevier, vol. 237(C).

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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L78 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Government Policy

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