TY - JOUR
T1 - The Housing Market Effects of Local Home Purchase Restrictions
T2 - Evidence from Beijing
AU - Sun, Weizeng
AU - Zheng, Siqi
AU - Geltner, David M.
AU - Wang, Rui
N1 - Publisher Copyright:
© 2016, Springer Science+Business Media New York.
PY - 2017/10/1
Y1 - 2017/10/1
N2 - Home prices have surged in major Chinese cities, leading to concerns of asset price bubbles and housing affordability. The policy of home purchase restrictions (HPR) has been one of China’s harshest housing market interventions to squeeze out speculative demand and dampen the soaring home prices. Beijing was the first city to implement the HPR. Employing the regression discontinuity design technique, we find that Beijing’s HPR policy triggered a 17–24 % decrease in resale price, a drop in the price-to-rent ratio of about a quarter of its mean value, and a deep (1/2 to 3/4) reduction in the transaction volume of the for-sale market, with no significant change in the rent or the transaction volume of rental units. In submarkets where housing supply was less elastic, the effects of the HPR were larger in price and smaller in quantity, suggesting that wealthy buyers likely benefited more from the HPR. The scope of the analysis does not allow conclusions regarding the persistence or longevity of these effects.
AB - Home prices have surged in major Chinese cities, leading to concerns of asset price bubbles and housing affordability. The policy of home purchase restrictions (HPR) has been one of China’s harshest housing market interventions to squeeze out speculative demand and dampen the soaring home prices. Beijing was the first city to implement the HPR. Employing the regression discontinuity design technique, we find that Beijing’s HPR policy triggered a 17–24 % decrease in resale price, a drop in the price-to-rent ratio of about a quarter of its mean value, and a deep (1/2 to 3/4) reduction in the transaction volume of the for-sale market, with no significant change in the rent or the transaction volume of rental units. In submarkets where housing supply was less elastic, the effects of the HPR were larger in price and smaller in quantity, suggesting that wealthy buyers likely benefited more from the HPR. The scope of the analysis does not allow conclusions regarding the persistence or longevity of these effects.
KW - Beijing
KW - Chinese housing policy
KW - Home purchase restriction
KW - Housing market
UR - http://www.scopus.com/inward/record.url?scp=84990940954&partnerID=8YFLogxK
U2 - 10.1007/s11146-016-9586-8
DO - 10.1007/s11146-016-9586-8
M3 - Article
AN - SCOPUS:84990940954
SN - 0895-5638
VL - 55
SP - 288
EP - 312
JO - Journal of Real Estate Finance and Economics
JF - Journal of Real Estate Finance and Economics
IS - 3
ER -