Do Bank Loans and Local Amenities Explain Chinese Urban House Prices

70 Pages Posted: 12 Mar 2015

See all articles by Daisy Huang

Daisy Huang

Southwestern University of Finance and Economics (SWUFE)

Charles K. Leung

City University of Hong Kong

Baozhi Qu

China Merchants Group

Date Written: March 9, 2015

Abstract

Based on Chinese city-level data from 1999 to 2012 and controlling for geological, environmental, and social diversity, this study suggests that credit plays a significant role in driving up house prices after the Great Recession, whereas property prices only influence bank lending before 2008. Local amenities such as higher education, green infrastructure, healthcare, and climate also positively affect house prices. Moreover, the impacts of bank loans on housing prices tend to be related to the level of amenities, suggesting an integrated approach (i.e. combining macroeconomic and urban economic variables) of housing market for the future research.

Keywords: endogenous income and endogenous amenities; bank loans and monetary policy; multicollinearity; clustered standard errors

JEL Classification: G21; O18; R11

Suggested Citation

Huang, Daisy and Leung, Charles Ka Yui and Qu, Baozhi, Do Bank Loans and Local Amenities Explain Chinese Urban House Prices (March 9, 2015). ISER Discussion Paper No. 928, Available at SSRN: https://ssrn.com/abstract=2575533

Daisy Huang

Southwestern University of Finance and Economics (SWUFE) ( email )

55 Guanghuacun St,
Chengdu, Sichuan 610074
China

Charles Ka Yui Leung (Contact Author)

City University of Hong Kong ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

Baozhi Qu

China Merchants Group ( email )

38th Floor, Shun Tak Centre
168-200 Connaught Rd. C
Hong Kong
China

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