Research on the Impact of Regional Public Services on Housing Prices – Based on Data from 89 County-level Administrative Regions in Zhejiang Province

Description

In 1998, a significant reform took place in the Chinese housing system. After the reform, the Chinese government abolished the welfare system of housing allocation by work units, and real estate gradually became commercialized. Over the past twenty years, China's real estate market has developed rapidly, and regional differentiation in the real estate market has become increasingly evident as urbanization accelerates. It is worth studying how to curb irrational increases in housing prices and promote the stable development of the real estate market.

As a scarce public good, public services not only profoundly affect residents' quality of life but also play an indispensable role in regional economic development. There are significant differences in public services between regions in China, and housing prices also show noticeable regional differences. This paper focuses on the impact of regional public services on housing prices and studies the situation from an empirical perspective.

Using panel data from 89 county-level administrative districts in Zhejiang Province from 2015 to 2019, this paper constructs a comprehensive index of public services based on principal component analysis and sets up an econometric model to test the impact of regional public services on commodity housing prices. The empirical results show that, firstly, within Zhejiang Province, public services significantly positively affect commodity housing prices, with higher housing prices in areas with better public service quality. Secondly, the impact of public services on commodity housing prices shows significant regional differences. Within Zhejiang Province, housing prices in municipal districts are significantly positively affected by the quality of public services, while the impact of public services on housing prices in non-municipal districts is not substantial.

To promote balanced development of the real estate market, the following measures can be taken: firstly, the government should promote the equalization of public services and reasonably guide population flow. Secondly, since public services have varying impacts on housing prices in different cities, differentiated real estate control policies should be implemented according to local conditions, making rational use of the influence of public services on housing prices.

Period	31 Aug 2022 → 31 May 2023