Abstract
PurposeFrom January 2021, the potential flow of Chinese household non-mortgage loans, including business loans and short-term consumption loans to the residential real estate market, has attracted the attention of the regulatory authorities. This study aims to examine the effects of household non-mortgage loans on the Chinese residential real estate market.Design/methodology/approachBased on a monthly data set between July 2011 and December 2019, this study adopts a cointegration analysis.FindingsThis study finds that household non-mortgage loans do play a significant role in driving residential real estate prices in China.Originality/valueWhile many studies have examined the Chinese real estate market and its linkage with the financial system and the economy, this study is the first of its kind in the academic literature that exclusively focusses on the role of non-mortgage loans in real estate prices, and makes an original contribution.
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