Journal article

Long-Term and Short-Term House Price Dynamics in China's First Tier and Second Tier Main 13 Cities

JingJing Justine Wang, Pu Chen, John S Croucher, Piyush Tiwari

CHINESE ECONOMY | ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD | Published : 2020

Abstract

This article identifies the main drivers and assesses housing bubbles in China’s first-tier and second-tier main 13 cities’ aggregated house prices for 2007Q2 through 2018Q4. The empirical analysis is conducted using robust econometric multiple frameworks, undertaken using the forms of OLS and VECM techniques. The outcomes suggest that house prices attain a long-run equilibrium every 7.14 quarters, with a short-term correction by their own macroeconomic forces including share performance, interest rate, and GDP. Our findings suggest the three macroeconomic drivers identified are effective to stabilize the housing markets. Governments could reduce large fluctuations on house prices and balanc..

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