Premium
Revisiting the determinants of house prices in China’s megacities: Cross‐sectional heterogeneity, interdependencies and spillovers
Author(s) -
Liu Chunping,
Ou Zhirong
Publication year - 2022
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/manc.12397
Subject(s) - megacity , interdependence , house price , economics , china , economic geography , econometrics , economy , geography , archaeology , political science , law
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.