Macroeconomic drivers effect on housing sale prices in China
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 12 March 2024
Abstract
Purpose
The purpose of this study is to conduct a thorough empirical investigation of the intricate relationship between urban housing sales prices and land supply prices in China, with the aim of elucidating the underlying economic principles governing this dynamic interplay.
Design/methodology/approach
Using monthly data of China, the authors use the asymmetry nonlinear autoregressive distributed lag (NARDL) model to test for nonlinearity in the relationship between land supply price and urban housing prices.
Findings
The empirical results confirm the existence of an asymmetric relationship between land supply price and urban housing prices. The authors find that land supply price has a positive and statistically significant impact on urban housing prices when land supply is increasing. Policymakers should strive to strike a balance between safeguarding residents’ housing rights and maintaining market stability.
Research limitations/implications
Although the asymmetric effect of land supply price has been identified as a significant contributor in this study, it is important to note that the research primarily relies on time series data and focuses on analysis at the national level. Although time series data offer a macroscopic perspective of overall trends within a country, they fail to adequately showcase the structural variations among different cities.
Practical implications
To ensure a stable housing market and meet residents’ housing needs, policymakers must reexamine current land policies. Solely relying on restricting land supply to control housing prices may yield counterproductive results. Instead, increasing land supply could be a more viable option. By rationally adjusting land supply prices, the government can not only mitigate excessive growth in housing prices but also foster the healthy development of the housing market.
Originality/value
First, the authors have comprehensively evaluated the impact of land supply prices in China on urban housing sales prices, examining whether they play a facilitating or mitigating role in the fluctuation of these prices. Second, departing from traditional linear analytical frameworks, the authors have explored the possibility of a nonlinear relationship existing between land supply prices and urban housing sales prices in China. Finally, using an advanced NARDL model, the authors have delved deeper into the asymmetric effects of land supply prices on urban housing sales prices in China.
Keywords
Acknowledgements
This manuscript has not been received or subjected to review at another journal or other publishing outlets.
Funding: Authors declare nonfunding for this present research.
Compliance with ethical standards: Authors declare no conflicts of interest at any level of this study.
Declaration of interest statement: The authors declare that they have no financial and personal relationships with other people or organizations that can inappropriately influence this work, and there is no professional or other personal interest of any nature or kind in any product, service and/or company that could be construed as influencing the position presented in, or the review of, the manuscript entitled, “Macroeconomic Drivers Effect on Housing Sale Prices in China.”
Citation
Wang, A., Hussain, S. and Yan, J. (2024), "Macroeconomic drivers effect on housing sale prices in China", International Journal of Housing Markets and Analysis, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJHMA-12-2023-0182
Publisher
:Emerald Publishing Limited
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