Urban Leverage and Housing Price in China

Wanying Lu; Jianfu Shen

doi:10.3390/jrfm15020087

Urban Leverage and Housing Price in China

Wanying Lu
, Jianfu Shen

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

2 Citations (Scopus)

Abstract

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 language	English
Article number	87
Journal	Journal of Risk and Financial Management
Volume	15
Issue number	2
DOIs	https://doi.org/10.3390/jrfm15020087
Publication status	Published - Feb 2022

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 11 Sustainable Cities and Communities

Keywords

credit supply
housing price
housing purchase restrictions
urban leverage

ASJC Scopus subject areas

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

More information

10.3390/jrfm15020087

http://hdl.handle.net/10397/99691

Cite this

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title = "Urban Leverage and Housing Price in China",

abstract = "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.",

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AU - Lu, Wanying

AU - Shen, Jianfu

N1 - Funding Information: Funding: This research was funded by the Hong Kong Polytechnic University, grant numbers P0030199 and P0038209. Publisher Copyright: © 2022 by the authors. Licensee MDPI, Basel, Switzerland.

PY - 2022/2

Y1 - 2022/2

N2 - 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.

AB - 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.

KW - credit supply

KW - housing price

KW - housing purchase restrictions

KW - urban leverage

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DO - 10.3390/jrfm15020087

M3 - Journal article

AN - SCOPUS:85130497861

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VL - 15

JO - Journal of Risk and Financial Management

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IS - 2

M1 - 87

ER -

Urban Leverage and Housing Price in China

Abstract

UN SDGs

Keywords

ASJC Scopus subject areas

More information

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