The Housing Market Effects of Local Home Purchase Restrictions: Evidence from Beijing

Weizeng Sun, Siqi Zheng, David M. Geltner, Rui Wang*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

68 Citations (Scopus)


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.

Original languageEnglish
Pages (from-to)288-312
Number of pages25
JournalJournal of Real Estate Finance and Economics
Issue number3
Publication statusPublished - 1 Oct 2017
Externally publishedYes


  • Beijing
  • Chinese housing policy
  • Home purchase restriction
  • Housing market


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