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Asymmetric Fluctuating Behavior of China's Housing Prices

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  • Wen-Yuan Lin
  • I-Chun Tsai

Abstract

The present study explains the reasons for the imbalanced development of the Chinese housing market. Using the quantile autoregression unit-root test, we examine housing prices in China's five major cities. The results show that the rising and falling of housing prices in these cities exhibits asymmetric reversion. When housing prices fall, market capital is highly sensitive to housing prices, and housing prices resist the pressure to fall further. However, when housing prices rise, the housing market becomes imbalanced, with housing prices tending to overreact in an upturn. The results of this study indicate that when housing prices rise irrationally, the government should intervene in the housing market promptly to prevent housing bubbles.

Suggested Citation

  • Wen-Yuan Lin & I-Chun Tsai, 2016. "Asymmetric Fluctuating Behavior of China's Housing Prices," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(2), pages 107-126, March.
    • Handle: RePEc:bla:chinae:v:24:y:2016:i:2:p:107-126
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    References listed on IDEAS

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    4. Li, Victor Jing & Cheng, Andy Wui Wing & Cheong, Tsun Se, 2017. "Home purchase restriction and housing price: A distribution dynamics analysis," Regional Science and Urban Economics, Elsevier, vol. 67(C), pages 1-10.

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