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Region-specific Estimates of the Determinants of Real Estate Investment in China

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  • Stephen Mak
  • Lennon Choy
  • Winky Ho

Abstract

This paper utilises a reduced-form equilibrium model to investigate the possible sources of real estate investment differentials among 22 provinces, five autonomous regions and four municipalities of the People’s Republic of China. The model is estimated using panel data from 2001 to 2006, yielding a total of 186 observations. Specifically, empirical results suggest that demographic, economic and planning factors are the major determinants to cause real estate investment to vary among Chinese regions. The relatively small coefficient estimate of real interest rates indicates that it has a significant but modest impact. Based on the coefficient estimates, this paper finally suggests that the Chinese government should focus and work on several policy parameters in order to achieve a more balanced state of real estate investment across Chinese regions.

Suggested Citation

  • Stephen Mak & Lennon Choy & Winky Ho, 2012. "Region-specific Estimates of the Determinants of Real Estate Investment in China," Urban Studies, Urban Studies Journal Limited, vol. 49(4), pages 741-755, March.
    • Handle: RePEc:sae:urbstu:v:49:y:2012:i:4:p:741-755
    DOI: 10.1177/0042098011407093
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    Cited by:

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    2. Ge He, 2013. "Equilibrium-Oriented Housing Supply: A Case Study of Chengdu City, China," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(4), pages 557-568, June.
    3. Iris Claus & Les Oxley & Jie Chen & Xuehui Han, 2014. "The Evolution Of The Housing Market And Its Socioeconomic Impacts In The Post-Reform People'S Republic Of China: A Survey Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 28(4), pages 652-670, September.
    4. Lozano Navarro, Francisco-Javier, 2015. "Elasticidad precio de la oferta inmobiliaria en el Gran Santiago [Housing supply elasticity in Greater Santiago]," MPRA Paper 65012, University Library of Munich, Germany.
    5. Honghao Ren & Henk Folmer & Arno Vlist, 2014. "What role does the real estate–construction sector play in China’s regional economy?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(3), pages 839-857, May.
    6. Naik, Prasad A., 2015. "Marketing Dynamics: A Primer on Estimation and Control," Foundations and Trends(R) in Marketing, now publishers, vol. 9(3), pages 175-266, December.

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