Title: The impact of continuous tightening policies on China's real estate industry

Authors: Tuo Han; Jianing Zhang

Addresses: Center for Big Data and Decision-Making Technologies, College of Business and Public Management, Wenzhou-Kean University, Wenzhou, 325060, China ' Center for Big Data and Decision-Making Technologies, College of Business and Public Management, Wenzhou-Kean University, Wenzhou, 325060, China

Abstract: This study investigates whether China's real estate industry is limited when facing tightening policies and the impact of government regulation on the real estate industry. We employed comprehensive indicators related to Chinese real estate from 2000 to 2019. The empirical results show that the land purchase area, social financing scale of the real estate industry, and real estate taxation negatively impact real estate prices. Further research shows that the land policy plays a dominating role in alleviating the rapid development of the real estate industry, which suggests that a centralised land policy could be beneficial for Chinese households. Consistent with empirical findings in international real estate markets, we find that social financing scale and tax policy have modest correlations with housing prices in China. The variance decomposition results show that explanatory powers of housing prices by the land area, social financing scale, and taxation are 26.8%, 5.9%, and 4.2%, respectively.

Keywords: housing price; real estate; tightening policies; government regulation; land policy; social financing scale; tax policy; China.

DOI: 10.1504/IJMEF.2023.131891

International Journal of Monetary Economics and Finance, 2023 Vol.16 No.3/4, pp.188 - 196

Received: 26 Jan 2022
Accepted: 29 May 2022
Published online: 04 Jul 2023 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article