Abstract
Abstract This research analyzes the relationship between housing and rental prices in 26 first-tier and second-tier cities in China before and after the policy of simultaneous rental and sales markets. The PVAR model and monthly panel data of these cities from June 2010 to December 2018 were employed. The study found that, before the policy of simultaneous rental and sales markets took effect, the housing and rental prices were relatively independent of each other, whereas the rental market in second-tier cities is affected more considerably by the sales market. After the enactment of the policy on simultaneous rental and sales markets, rental prices have a positive effect on housing prices, with this effect being more obvious in second-tier cities. The rental prices with the first-order lag have a significant negative impact on current rental price in first-tier cities. Considering the features of the housing market in different cities, the implementation of the simultaneous rental and sales markets policy needs to be more targeted and attention should be paid to preventing simultaneous irrational growth, both on the sales and rental markets.
Highlights
From the perspective of housing consumption, the real estate market includes the salesREAL ESTATE MANAGEMENT AND VALUATION, eISSN: 2300-5289 vol 29, no. 3, 2021 www.degruyter.com/view/j/remav market and the rental market (Tomal, 2020)
When the housing prices are controlled by the housing purchase restriction policy, the rental market is greatly affected by its own supply and demand so that the prosperity of the rental market forms a benign interaction between the rental and sales markets
In this paper, housing price and rent are regarded as two important factors which are interlinked in the housing market
Summary
From the perspective of housing consumption, the real estate market includes the salesREAL ESTATE MANAGEMENT AND VALUATION, eISSN: 2300-5289 vol 29, no. 3, 2021 www.degruyter.com/view/j/remav market and the rental market (Tomal, 2020). From the perspective of housing consumption, the real estate market includes the sales. The substitution effect between the rental market and sales market, speculative behavior of the real estate market, preferences of residents for a house of their own and changes in the supply and demand of the housing market will lead to a complex interrelationship between housing prices and rent, as well as rents and housing prices themselves. Regulatory measures may change the relationship between sales and rental markets by influencing the supply and demand of housing for sale and housing for rent(Tu, 2018). Relationships between housing and rental prices will have regional heterogeneity because of the differences in housing market development, housing policies and cultural backgrounds (Lisa, 2019)
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