What drives housing prices, rent and new construction in China
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 24 October 2017
Issue publication date: 20 November 2017
Abstract
Purpose
With this paper, the authors aim to investigate the drivers behind three of the most important aspects of the Chinese real estate market, housing prices, housing rent and new construction. At the same time, the authors perform a comprehensive empirical test of the popular 4-quadrant model by Wheaton and DiPasquale.
Design/methodology/approach
In this paper, the authors utilize panel cointegration estimation methods and data from 35 Chinese metropolitan areas.
Findings
The results indicate that the 4-quadrant model is well suited to explain the determinants of housing prices. However, the same is not true regarding housing rent and new construction suggesting a more complex theoretical framework may be required for a well-rounded explanation of real estate markets.
Originality/value
It is the first time that panel data are used to estimate rent and new construction for China. Also, it is the first time a comprehensive test of the Wheaton and DiPasquale 4-quadrant model is performed using data from China.
Keywords
Acknowledgements
The authors would like to thank graduate student Xing Lu from the Department of Finance in Shanghai University for helping them to collect data in this paper. We are also indebted to the data support from the Research Center of Financial Information in the School of Economics in Shanghai University.
Citation
Staikos, D. and Xue, W. (2019), "What drives housing prices, rent and new construction in China", International Journal of Housing Markets and Analysis, Vol. 10 No. 5, pp. 662-686. https://doi.org/10.1108/IJHMA-12-2016-0080
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited