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How does the COVID-19 pandemic affect housing prices in China?

Author

Listed:
  • Chong, Terence Tai Leung
  • Liu, Hengliang

Abstract

COVID-19 was first reported in Wuhan in late December 2019, and then spread throughout China, which has had great influence on many aspects of the economy. This paper uses the two-way fixed effects model to investigate the non-linear relationship between the death toll of COVID-19 and the changes in housing prices using monthly panel data from November 2019 to May 2020. The results suggest that there is a U-shaped relationship between monthly death toll of COVID-19 and the percentage changes of housing prices in cities. In addition, the housing markets of New First-tier cities are more sensitive to the COVID-19 pandemic than Second and Third-tier cities, which the pandemic has had little effect on. Similarly, monthly confirmed cases of COVID-19 come to the same conclusions.

Suggested Citation

  • Chong, Terence Tai Leung & Liu, Hengliang, 2020. "How does the COVID-19 pandemic affect housing prices in China?," MPRA Paper 102103, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:102103
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    References listed on IDEAS

    as
    1. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    2. Francke, Marc & Korevaar, Matthijs, 2021. "Housing markets in a pandemic: Evidence from historical outbreaks," Journal of Urban Economics, Elsevier, vol. 123(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    COVID-19; Housing prices; Non-linear relationship; New First-tier cities;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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    This paper has been announced in the following NEP Reports:

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