| Summary: | For the past few decades, housing system in China has gone through marketalization from the original state-allocation system. With the China’s economic take-off since the 1978 Opening up policy, housing market have experienced tremendous development, especially in the first-tier cities, like Beijing and Shanghai. In this research, we intended to identify the structural changes in Beijing housing market from 2005 to 2012 using Simultaneous Equation Model and Recursive Segmentation. Our analysis and comparison between whole sample model and structural changing model suggested the occurrence of two structural breaks at the third quarters of 2007 and 2010. In the first segment from 2005 to 2007 Quarter 3, price grew at a smooth rate; the second segment from 2007 Quarter 4 to 2010 Quarter 3 was generally a price soaring period following a slight downturn in 2008; and the 2010 Quarter 4 to 2012 Quarter reflected more volatility and fluctuation. With the established break points, this research paper further analyzed the implications of government policies on the housing market and tried to provide suggestions for the policy makers to promote a more efficient policy execution.
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