Household tenure choice and housing price volatility under a binding home-purchase limit policy constraint

Jiawei Chen; Chi Man Hui; Michael J. Seiler; Hong Zhang

doi:10.1016/j.jhe.2018.06.004

Household tenure choice and housing price volatility under a binding home-purchase limit policy constraint

Jiawei Chen, Chi Man Hui, Michael J. Seiler, Hong Zhang

Research output: Journal article publication › Journal article › Academic research › peer-review

9 Citations (Scopus)

Abstract

This study establishes a dynamic search-matching model with the home ownership market and rental markets unified within a single framework, against the background of China's home-purchase limit policy. We analyze the dynamic responses of household tenure choice, housing prices and market liquidity to a demographic shock. Our results show that, although the home-purchase limit policy can inhibit housing prices in the current period, the positive shock from demographic changes immediately triggers growth in rents and eventually leads to escalation in housing prices in subsequent periods.

Original language	English
Pages (from-to)	124-134
Number of pages	11
Journal	Journal of Housing Economics
Volume	41
DOIs	https://doi.org/10.1016/j.jhe.2018.06.004
Publication status	Published - 1 Sept 2018

Keywords

Home prices
Home-purchase limit policy
Household tenure choice
Search-matching model

ASJC Scopus subject areas

Economics and Econometrics

More information

10.1016/j.jhe.2018.06.004

Cite this

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title = "Household tenure choice and housing price volatility under a binding home-purchase limit policy constraint",

abstract = "This study establishes a dynamic search-matching model with the home ownership market and rental markets unified within a single framework, against the background of China's home-purchase limit policy. We analyze the dynamic responses of household tenure choice, housing prices and market liquidity to a demographic shock. Our results show that, although the home-purchase limit policy can inhibit housing prices in the current period, the positive shock from demographic changes immediately triggers growth in rents and eventually leads to escalation in housing prices in subsequent periods.",

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AB - This study establishes a dynamic search-matching model with the home ownership market and rental markets unified within a single framework, against the background of China's home-purchase limit policy. We analyze the dynamic responses of household tenure choice, housing prices and market liquidity to a demographic shock. Our results show that, although the home-purchase limit policy can inhibit housing prices in the current period, the positive shock from demographic changes immediately triggers growth in rents and eventually leads to escalation in housing prices in subsequent periods.

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KW - Search-matching model

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ER -

Household tenure choice and housing price volatility under a binding home-purchase limit policy constraint

Abstract

Keywords

ASJC Scopus subject areas

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