Population Aging, Mobility, and Real Estate Price: Evidence from Cities in China

Xinrui Wang,Jiuxia Sun,Eddie Hui

doi:10.3390/su10093140

Xinrui Wang, Jiuxia Sun + Show 1 more

Open Access

https://doi.org/10.3390/su10093140

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Abstract

Demographic factors are crucial to the sustainable development of one country. China’s population is aging at an accelerating rate and, together with the increasing mobility between cities, some special demographic issues have formed, which is quite related to the urban real estate market. The paper aims to investigate how the population aging and mobility affect housing prices at the city level, by using a set of two-period panel data of 294 prefecture-level cities in China. The results show that an increase in elderly dependency ratio by 1% leads to a rise in housing prices by 0.368%. Meanwhile, an increase in urbanization level by 1% drives up housing prices by about 0.139%, and a rise in the ratio of inter-regional migration by 1% will increase housing prices by about 1.038%. Furthermore, the policy of purchase limits could weaken the positive impacts of elderly dependency ratio and inter-regional migration on housing prices and, thus, plays a moderating role on the relationship between demographic structure and housing prices.

Highlights

Housing prices in China have been increasing rapidly especially in recent years, which has provoked widespread discussions among academics [1,2]
Our study focuses on the impacts of the two aspects of demographic transitions, e.g., population aging and population mobility on housing prices
Estimation 1 is conducted with only the independent variables, and the result shows children dependency ratio has a negative effect on housing prices while the effect of elderly dependency ratio is positive

Summary

Introduction

Housing prices in China have been increasing rapidly especially in recent years, which has provoked widespread discussions among academics [1,2]. Chen (2012) investigated the relationship between demographic change and housing demand using census data, and the results expected that the growth in housing demand would drop significantly in 2012, due to the changes in age structure [12] These researchers believed that housing prices would fall in the future due to the low fertility and the large elderly population. Chen’s (2013) study predicted that the negative impact of population aging on the housing market would not emerge until 2045 because of the positive impact of urbanization and other relevant factors [14] These explanations do contribute to an understanding of the relationship between demographic factors and the housing market at the national level. What effects can population aging and mobility at city level in China have on housing prices?

Literature Review

Empirical Model

Hypotheses

Data Description

Empirical Findings

Stationary Test

Conclusions