Revisiting the determinants of house prices in China's megacities: cross-sectional heterogeneity, interdependencies and spillovers

Liu, Chunping and Ou, Zhirong ORCID: https://orcid.org/0000-0002-4610-7183 2022. Revisiting the determinants of house prices in China's megacities: cross-sectional heterogeneity, interdependencies and spillovers. Manchester School 90 (3) , pp. 255-277. 10.1111/manc.12397

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Abstract

We revisit the determinants of house prices in China's megacities. Previous work on similar topics fails to account for the widespread cross-sectional heterogeneity and interdependencies, despite the importance of them. Using a PVAR estimated by the Bayesian method allowing for these features, we find each city is rather unique, especially on the extent to which local house prices are disturbed by external house price shocks. The spillovers may be partly related to the demand side before 2010, but seems more related to supply factors thereafter, due to the imposition of property purchase restrictions. The new evidence we establish therefore suggests that city-level stabilisation of house prices should fully respect local features, including how local markets respond to external disturbances.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Additional Information:	This is an open access article under the terms of the Creative Commons Attribution-NonCommercial- NoDerivs License
Publisher:	University of Manchester
ISSN:	1463-6786
Date of First Compliant Deposit:	13 December 2021
Date of Acceptance:	7 December 2021
Last Modified:	21 May 2023 07:16
URI:	https://orca.cardiff.ac.uk/id/eprint/146004

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