The Housing Market Effects of Local Home Purchase Restrictions: Evidence from Beijing
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. Be...
| Main Authors: | , , , , |
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| Other Authors: | |
| Format: | Article |
| Language: | English |
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Springer US
2017
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| Online Access: | http://hdl.handle.net/1721.1/111622 https://orcid.org/0000-0002-1024-7555 |
| _version_ | 1826194231912300544 |
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| author | Sun, Weizeng Zheng, Siqi Wang, Rui Geltner, David M. Geltner, David M |
| author2 | Massachusetts Institute of Technology. Department of Urban Studies and Planning |
| author_facet | Massachusetts Institute of Technology. Department of Urban Studies and Planning Sun, Weizeng Zheng, Siqi Wang, Rui Geltner, David M. Geltner, David M |
| author_sort | Sun, Weizeng |
| collection | MIT |
| description | 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. |
| first_indexed | 2024-09-23T09:52:56Z |
| format | Article |
| id | mit-1721.1/111622 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T09:52:56Z |
| publishDate | 2017 |
| publisher | Springer US |
| record_format | dspace |
| spelling | mit-1721.1/1116222022-09-26T14:17:55Z The Housing Market Effects of Local Home Purchase Restrictions: Evidence from Beijing Sun, Weizeng Zheng, Siqi Wang, Rui Geltner, David M. Geltner, David M Massachusetts Institute of Technology. Department of Urban Studies and Planning Geltner, David M 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. 2017-09-22T14:51:34Z 2017-09-22T14:51:34Z 2016-10 2017-09-10T03:25:24Z Article http://purl.org/eprint/type/JournalArticle 0895-5638 1573-045X http://hdl.handle.net/1721.1/111622 Sun, Weizeng et al. “The Housing Market Effects of Local Home Purchase Restrictions: Evidence from Beijing.” The Journal of Real Estate Finance and Economics 55, 3 (October 2017): 288-312 © 2016 Springer Science+Business Media New York https://orcid.org/0000-0002-1024-7555 en http://dx.doi.org/10.1007/s11146-016-9586-8 The Journal of Real Estate Finance and Economics Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/ Springer Science+Business Media New York application/pdf Springer US Springer US |
| spellingShingle | Sun, Weizeng Zheng, Siqi Wang, Rui Geltner, David M. Geltner, David M The Housing Market Effects of Local Home Purchase Restrictions: Evidence from Beijing |
| title | The Housing Market Effects of Local Home Purchase Restrictions: Evidence from Beijing |
| title_full | The Housing Market Effects of Local Home Purchase Restrictions: Evidence from Beijing |
| title_fullStr | The Housing Market Effects of Local Home Purchase Restrictions: Evidence from Beijing |
| title_full_unstemmed | The Housing Market Effects of Local Home Purchase Restrictions: Evidence from Beijing |
| title_short | The Housing Market Effects of Local Home Purchase Restrictions: Evidence from Beijing |
| title_sort | housing market effects of local home purchase restrictions evidence from beijing |
| url | http://hdl.handle.net/1721.1/111622 https://orcid.org/0000-0002-1024-7555 |
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