Urban Leverage and Housing Price in China

Wanying Lu, Jianfu Shen

Research output: Journal article publicationJournal articleAcademic researchpeer-review

1 Citation (Scopus)


This paper examines whether urban leverage, defined by the bank loan-to-deposit ratio in a city, affects housing prices in China. Using a panel dataset of 236 cities and hedonic models, we find a depressing effect of urban leverage on housing price in first-and second-tier cities while leaving third-and fourth-tier cities unaffected. Urban leverage negatively affects housing prices by influencing credit supply. Moreover, the difference-in-differences analysis indicates that purchase restriction policies amplify the depressing effect of urban leverage on housing prices. Overall, we show that urban leverage is an important determinant of housing prices in China.

Original languageEnglish
Article number87
JournalJournal of Risk and Financial Management
Issue number2
Publication statusPublished - Feb 2022


  • credit supply
  • housing price
  • housing purchase restrictions
  • urban leverage

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Accounting
  • Business, Management and Accounting (miscellaneous)


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