The rise in house prices in China: Bubbles or fundamentals?

Author

Jianying HU, Peking University
Liangjun SU, Singapore Management UniversityFollow
Sainan JIN, Singapore Management UniversityFollow
Wanjun JIANG, Peking University

Publication Type

Journal Article

Version

publishedVersion

Publication Date

3-2006

Abstract

The dramatic rise of house prices in many cities of China has brought huge attention from both the governmental and academic circles. There is a huge debate on whether the increasing house prices are driven by market fundamentals or just by speculation. Like Levin and Wright (1997a, 1997b), we decompose house prices in China into fundamental and non−fundamental components. We also consider potential nonlinear feedback from the historical growth rate of house prices on the current house prices and propose a semiparametric approach to estimate the speculative components in the model. We demonstrate that the non−fundamental part contributes a relatively small proportion of the rise of house prices in China.

Discipline

Asian Studies | Econometrics | Real Estate

Research Areas

Econometrics

Publication

Economics Bulletin

Volume

3

Issue

7

First Page

1

Last Page

8

ISSN

1545-2921

Publisher

Economics Bulletin

Citation

HU, Jianying; SU, Liangjun; JIN, Sainan; and JIANG, Wanjun. The rise in house prices in China: Bubbles or fundamentals?. (2006). Economics Bulletin. 3, (7), 1-8.
Available at: https://ink.library.smu.edu.sg/soe_research/2039

Copyright Owner and License

Authors

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.

Additional URL

http://www.economicsbulletin.com/2006/volume3/EB-06C20006A.pdf