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Can a house resale restriction policy curb speculation? Evidence from a quasi-natural experiment in China

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  • Lan, Hao
  • Moreira, Fernando
  • Zhao, Sheng

Abstract

Speculative opportunity is commonly defined as the chance for agents to resell an asset at a higher price. Few previous studies have analyzed how speculation works in housing markets. In this paper, we use a two-stage resale restriction policy implemented in China as an exogenous shock on the speculation chance in the second-hand housing market. We find that a sudden reduction in the future resale opportunity directly causes a significant decrease in house transaction prices and trading volumes. The findings may help regulators strategically intervene in the housing market by adjusting the resale rights of home buyers.

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  • Lan, Hao & Moreira, Fernando & Zhao, Sheng, 2023. "Can a house resale restriction policy curb speculation? Evidence from a quasi-natural experiment in China," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 841-859.
    • Handle: RePEc:eee:reveco:v:83:y:2023:i:c:p:841-859
    DOI: 10.1016/j.iref.2022.10.024
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