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 publicationJournal articleAcademic researchpeer-review

5 Citations (Scopus)


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 languageEnglish
Pages (from-to)124-134
Number of pages11
JournalJournal of Housing Economics
Publication statusPublished - 1 Sep 2018


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

ASJC Scopus subject areas

  • Economics and Econometrics

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