Online property brokerage platform and prices of second-hand houses: Evidence from Lianjia’s entry

Abstract

Despite the popular emergence of online property brokerage platforms in the second-hand housing market, little is known about whether and how these platforms would influence the market, especially in terms of housing price. We thus assemble and analyze data from multiple sources about the entry of a representative Chinese platform (Lianjia.com) and local housing market for empirical validation. Our analysis found that platform entry may decrease the price of second-hand houses, and the impact would be weakened with the increase in new house price and total households. Moreover, platform entry eventually may boost the sales of second-hand houses. These notable findings offer several important contributions. First, our research is one of the first to explore the intricate impact of online property brokerage platforms on housing price. Second, our research is one of the few to study the impact of online intermediaries on the sales price of large consumer goods. Third, we further uncover some contingent factors and subsequent downstream outcome of this impact. Practically, our findings also offer important implications to practitioners and policy makers.