Purchase Restriction Policy Research Articles

The Impact of Real Estate Purchase Restriction Policy on Urban Economic Development—A Case Study of Beijing

Since 2010, Beijing's purchase restriction policy has been adjusted several times to adapt to the market and promote stability. In April 2024, the policy was eased for housing areas outside the Fifth Ring Road, marking the first major adjustment in 13 years. This paper analyses the economic impact of Beijing's real estate purchase restriction policy, focusing on its effect on investment, consumption, industrial structure, and employment. The study indicates that the purchase restriction policy initially hinders investment and consumption in the short term but contributes to market stability and industrial optimization in the long run. The policy change has increased housing sales and growth in related industries outside the Fifth Ring Road, promoting economic development in the suburbs. Furthermore, the policy has a nuanced impact on the employment market, encouraging labor mobility toward high-tech and service industries while affecting employment in real estate-related sectors. The study suggests that policymakers need to consider the impacts of various aspects to ensure the healthy development of the real estate and employment markets.

Marriage entry, divorce and reconciliation: The unintended consequence of the home purchase restriction policy in China

This study investigates the unintended socioeconomic consequences of housing market regulations, focusing on the home purchase restriction (HPR) policy implemented in cities across China. While the primary aim of the HPR policy is to curb property prices by limiting the number of properties a household can purchase, its broader impact on family formation, particularly marriage and divorce patterns, remains underexplored. Applying Becker’s economic theory of marriage, which views marital decisions as rational choices influenced by socioeconomic factors, this study examines how the HPR policy affects family formation and dissolution across different city tiers and age groups in China. Our analysis reveals several key findings. First, the HPR policy effectively contributed to a decrease in house prices, aligning with its primary objective. However, it also led to delayed marriages among younger age groups, especially in first-tier cities, where housing affordability is a significant concern. Second, the policy inadvertently encouraged strategic divorces, allowing couples to circumvent purchase restrictions and acquire additional properties. This loophole undermines the policy’s effectiveness in reducing housing demand and stabilizing prices. These results highlight the complex interplay between housing market regulations and family demographics, emphasizing the need for policymakers to consider the broader societal impacts of non-family-oriented policies. As China, like many other societies, faces challenges related to the second demographic transition—such as declining marriage and fertility rates—the findings of this study serve as a cautionary tale. Housing policies, while effective in addressing market concerns, can have significant and sometimes counterproductive effects on family stability and formation, potentially exacerbating the demographic trends a society aims to mitigate.

Examining the policy outcomes of cancelling the house purchase restriction: quasi-experimental evidence from China

While the impact of the house purchase restriction (HPR) policy on the housing market in China has been deeply examined, there is still little known about how the housing market varies when such policy is abandoned. To fill this gap, we first theoretically propose two hypotheses concerning the relationship between abandoning HPR policy and housing price and transaction based on the housing literature. We then examine the hypotheses by taking Jinan, China as empirical case that offer an excellent policy setting of some districts having discarded the policy while the other remains. The results derived from Synthetic Control Method (SCM) showed that the cancellation of the HPR policy plays a vital role in increasing the transaction volume, but it fails to promote house prices. The findings remain reliable after a series of placebo and robustness tests. This article adds new insight to the debate on efficacy of government intervention via more granular quantitative data, and further contributes to policy implications regarding housing market development.

Unleashing the real estate market: assessing the impact of relaxed housing purchase restriction policy on house prices in China

ABSTRACT This study examines the effects of the relaxed housing purchase restriction (RHPR) policy on house prices in China, using panel data from 41 cities between January 2021 and June 2022. The study finds that the RHPR policy has a positive effect on the existing housing market, contributing to its stabilization. However, the impact on new house prices is unclear. Mechanism analysis indicates that the policy effectively boosts house demand and fosters positive market expectations. The study also finds that the policy has a greater impact on second-tier and northern cities. Additionally, the research indicates that the policy has stimulated house demand among non-registered populations and in non-restricted purchase zones. These results emphasize the importance of timely adjustment and optimization of real estate policies to maintain a stable and sustainable market.

The Impact of Real Estate Purchase Restriction Policy on Urban Economic Development—A Case Study of Beijing

Since 2010, Beijing's purchase restriction policy has been adjusted several times to adapt to the market and promote stability. In April 2024, the policy was eased for housing areas outside the Fifth Ring Road, marking the first major adjustment in 13 years. This paper analyses the economic impact of Beijing's real estate purchase restriction policy, focusing on its effect on investment, consumption, industrial structure, and employment. The study indicates that the purchase restriction policy initially hinders investment and consumption in the short term but contributes to market stability and industrial optimization in the long run. The policy change has increased housing sales and growth in related industries outside the Fifth Ring Road, promoting economic development in the suburbs. Furthermore, the policy has a nuanced impact on the employment market, encouraging labor mobility toward high-tech and service industries while affecting employment in real estate-related sectors. The study suggests that policymakers need to consider the impacts of various aspects to ensure the healthy development of the real estate and employment markets.

Building and carbon emissions: Evidence from real estate purchase restriction policy

Carbon emission reduction in the building sector plays an essential role in the global mitigation effort, and a policy of limiting the expansion of buildings could be a critical intervention. Previous studies mainly focused on the process and materials in the building sector to discuss ways of building decarbonization rather than the restriction of building expansion. The Real Estate Purchase Restriction policy in China produced powerful enforcement to control the disorder expansion of building construction in China. Using the difference-in-differences model, this study finds that the policy caused approximately 5.7 million tons of carbon emissions decrease per year in the pilot cities, which could save about 52.55 million dollars social cost of carbon. Through the examination of the impact mechanism, we found that the implementation of real estate purchase restriction policy contributed to carbon emissions' reduction via reducing population growth and reducing freight volume.

Retailer's ordering decisions with consumer panic buying under unexpected events

A disruption in demand caused by unexpected events, such as extreme weather and epidemics can trigger panic buying by consumers, adversely affecting firms' inventory management. From the demand side, focusing on event-sensitive products, this paper develops an analytical model to examine how consumer panic buying behaviors resulting from unexpected events affects a retailer's ordering decisions and expected profits under both practices without and with purchase restriction policies. The main results are as follows. First, consumer panic buying behavior pushes the retailer to increase the order quantity in the first period and reduce the order quantity in the second stage. Second, regardless of the possibility of unexpected events, a moderate panic buying level is most beneficial to the retailer. Third, a large inventory capacity is always advantageous for the retailer to cope with unexpected events without a purchase restriction policy, whereas only when the inventory capacity is at a moderate level, the retailer can benefit from consumer panic buying under a purchase restriction policy. In addition, the impact of consumer panic buying behavior on the retailer's profit remains unchanged under the risk of supply interruption. However, considering an emergency order, when panic buying is not too intensive to lead to a loss of demand in the first period, it can still harm the retailer in some cases.

Inside job: Evidence from the Chinese housing market

AbstractUsing a comprehensive data set of housing transactions in Beijing, China, we find that government officials are more likely than non‐officials to buy housing units before the government‐imposed housing purchase restriction policy. We also find that officials use their power to speed up the loan application process and pay higher prices to complete the transactions before the policy. Overall, the results suggest that officials trade on private information gained during the policymaking process.

Do local governments capitalise on the spillover effect in the housing market? Quasi-experimental evidence from house purchase restrictions in China

This study used the house purchase restriction (HPR) policy applied between 2016 and 2017 in China to investigate whether local governments actively capitalised on the spillover effects induced by housing policy in adjacent cities. The difference-in-differences (DID) model was employed to estimate the spillover effects of HPR policy on land and bond markets for treatment cities and control cities. After implementation of the HPR policy, land conveyance area and land revenue in unregulated cities adjacent to regulated cities, increased by 32.4% and 47.3%, respectively, relative to nearby unregulated cities not adjacent to regulated cities. The issuance volume of urban investment bonds, which heavily relies on land price and revenue, in unregulated cities adjacent to regulated cities, increased by 163.5% in comparison with nearby control cities and the yield spread of newly issued bonds decreased. Overall, this study indicates that local governments actively capitalise on the spillover effects induced by housing policy in adjacent cities.

Housing purchase intention of the floating population under the home purchase restriction policy in China

Housing security is fundamental to the life of rural-urban migrants in cities, and the housing choices of rural-urban migrants have drawn increasing attention in recent studies. However, the role of housing policies is still yet to be explored. This paper aims to investigate the effect of housing policies on rural-urban migrants’ purchasing intention. Taking China as an example, the empirical results indicate that, somewhat surprisingly, the home purchase restriction policy implemented by the Chinese government raises the floating population’s intention to purchase houses in the host city. Yet, such a linkage varies with income and housing status among the floating population, while it gives rise to changes in their consumption behaviors. This study thus provides new insights into the effect of housing policies and how floating populations make housing purchase decisions, yielding critical implications on how to optimize housing policies.

Value of qualification to buy a house: Evidence from the housing purchase restriction policy in China

China's housing purchase restriction (HPR) policy imposes administrative restrictions on households' home purchase eligibility to curb speculative demand. We quantify households' willingness to pay (WTP) to re-acquire such eligibility. The empirical results based on the staggered DID specification suggest that when local governments implement the HPR policy, the transaction prices of judicial housing auctions legally exempted from HPR increase by 18.91 %. This HPR-exempted qualification premium can be converted to an estimate of 22.48 % of the transaction price as buyers' WTP for home purchase eligibility. The heterogeneity analysis also suggests that the WTP significantly increases when speculative incentives are stronger in the housing market. If policymakers in mainland China consider replacing the HPR policy with an additional buyer transaction tax like that in Singapore and Hong Kong, China, the WTP estimates can serve as the benchmark in setting the tax rate.

A Study on the Effects of the Purchase Restriction Policy on the Financial Leverage and Risk of Real Estate Enterprises

This study utilizes data from China's listed real estate enterprises between 2009-2019 and employs the continuous DID model to regress the two rounds of purchase restriction policies. The empirical results reveal that the first round of restriction policy (2010-2014) significantly improved the leverage ratio, while the second round (2016-2019) had an inhibitory effect on the leverage ratio. The impact on the leverage ratio was transmitted through the housing price. In the first round, the policy did not work, and the house prices and leverage ratio continued to rise. In contrast, the second round had a negative impact on the house price, and the increase of the leverage ratio was restrained through this transmission channel. Additionally, the study found that the first round had no impact on short-term and long-term solvency, while the second round improved short-term solvency but weakened long-term solvency. These findings provide a new perspective for preventing financial risk in the real estate industry in the future.

Research of the influence of automobile purchase restriction policy on the pricing of motor vehicles in judicial appraisal enterprises

PurposeThe purpose of this paper is to take second-hand vehicles at judicial auctions in China as the primary research direction and to explore the impact of purchasing restriction policy and city size on the relationship between the appraisal price and transaction price of second-hand motor vehicles in the context of auto purchase restriction in China from a microscopic angle. It attempts to broaden the pricing ideas of judicial appraisal enterprises in providing appraisal prices of second-hand motor vehicles and to put forward suggestions for the optimization of appraisal prices and appraisal standards of judicial appraisal enterprises.Design/methodology/approachWith the help of Python, this paper crawls 59,038 lines of valid data from three leading internet judicial auction platforms, namely “Ali Auction,” “China Beijing Equity Exchange” and “Gong Pai Wang,” as research samples. Besides, this paper forms a database containing judicial auction used car appraisal prices, transaction prices, motor vehicle purchase restrictions and whether the motor vehicle carries a license plate. By constructing a multiple regression model, the impact of automobile purchase restriction policy on the price of motor vehicles appraised by judicial appraisal enterprises is investigated.FindingsWith the help of the multivariate regression model, it found that under the same condition, the city where the auction took place implemented the automobile purchase restriction before the end of the auction. The court has specified that the buyer could directly obtain the license plate after the auction. The transaction price and the evaluation price ratio will be statistically larger, which proves that the license plate has an evident value in the transaction and is traded as subject matter by the residents, and consequently brings a higher premium to the price of automobile transaction in internet judicial auction. Meanwhile, the purchase restriction policy in the first-tier cities has resulted in a significant premium on automobile license plates, which is much higher than the automobile license plate premium level in non-first-tier cities under the same conditions.Social implicationsCar ownership continues to rise with rapid economic development worldwide. Control the growth of car ownership, some countries and regions mainly restrict the issuance of motor vehicle license plates, which indirectly leads to vehicle license plate indicators becoming a scarce resource. National laws permit judicial auction as a means for the people's courts to settle creditors' claims in enforcement procedures of civil cases. In the judicial auction process, the People's Court introduces third-party evaluation enterprises to appraise, assess and audit the subject and obtain the appraisal price, which guides the bidding behavior of used car buyers and indirectly affects the transaction price of used cars.Originality/valueAs the only subject capable of assessing the value of used cars at judicial auctions, judicial appraisal enterprises have received widespread attention for their appraisal results. This paper researches this field by screening the factors affecting the ratio of motor vehicle transaction price to the appraised price. It also analyzes how the ratio of motor vehicle transaction price to appraised price is affected by motor vehicle purchase restrictions and the situation with license plates. This paper examines the existence of premiums for motor vehicle transactions with license plates, evaluates the purchase restrictions in cities with motor vehicle purchase restrictions and verifies that the premiums for motor vehicles at judicial auctions are affected by purchase restriction policies as well as the influence of city class. These studies have important implications for judicial appraisal enterprises to establish reasonable appraisal mechanisms and optimize appraisal prices. They also provide new ideas and methods for appraisal enterprises to assess the value of used vehicles at judicial auctions.

Explore the Password of the Current Real Estate Market

In recent years, the heat of the real estate market has decreased, and the price of real estate in a few places has declined slightly, mainly due to the effect of the purchase restriction policy and the slowing down of economic growth. Is it difficult to develop the real estate industry in the future? Will the real estate market be depressed for a long time? For example, some people think that the real estate cannot be sold, and the price must be greatly reduced? I believe that the real estate industry will continue to develop. It is only the subjective desire of some people that the long-term price reduction of real estate will not rise. This desire is neither in the interests of the state nor in the interests of society, nor in line with the laws of the socialist market economy. Based on the comprehensive analysis of various factors, China's real estate industry will continue to develop, the real estate market will be more sound, and the real estate price will definitely not fall all the time, and will certainly "rise steadily".

Value of Qualification to Buy a House: Evidence from the Housing Purchase Restriction Policy in China

Value of Qualification to Buy a House: Evidence from the Housing Purchase Restriction Policy in China

Impact of the Reduction of VAT Rate on Southeast Coastal Real Estate Enterprises

This paper takes the southeast coastal real estate listed enterprises that have been at the forefront of China’s reform for many years as the research object. Through theoretical analysis and descriptive statistical analysis, it studies the impact of the reduction of VAT (value-added tax) rate in 2019 on the southeast coastal listed real estate enterprises from the perspectives of sales revenue, costs, tax burden, profit, and cash flow. The overall operating tax rate has shown a volatile downward trend; the average operating income level has shown a volatile upward trend; the purchase cost has decreased slightly and the change was not significant; the total profits of enterprises have shown a cyclical upward trend. Due to the impact of the real estate purchase restriction policy and financing environment in recent years, the reduction of tax rate has an effective but not significant impact on the enterprise cash flow. Overall, the tax rate reduction still has a positive impact on enterprises. Combined with the problems in the process of policy implementation, this paper puts forward that those enterprises should make scientific and reasonable tax planning, pay attention to the management of purchase and sales contracts and the mode of cooperation with upstream enterprises, regulate taxation to reduce tax-related risks, improve the management level of enterprises, and establish an industry finance integration system. At the national policy level, there is limited room and effect for the reduction of the VAT rate, and more preferential tax relief policies should be given directly, not limited to VAT, but can be extended to corporate income tax. In this way, that could improve the effectiveness of the tax reduction policy in the southeast coastal real estate industry and provide a reference for relevant industries in other regions to solve similar problems.

Ripple effect of the housing purchase restriction policy and the role of investors' attention

The housing purchase restriction policy (the HPR policy) implemented in China is regarded as one of the strictest. Different from the existing studies on the local impact of the HPR policy, this paper verifies the ripple effect of the HPR policy from adjacent cities. With a monthly panel data of 58 cities in China, this study finds that the HPR policy exerts a significant ripple effect. More adjacent cities implementing the HPR policy will drive up local housing prices, and the attention of investors plays a vital role in this process. By doing so, this paper adds some new insights for the studies on the HPR policy, the ripple effect of housing prices, and the housing market sentiment. Our results also provide some implications for the policy-making process in terms of regional cooperation or coordination.

Can Purchase Restrictions Really Limit House Prices

This article uses the data of residential commercial housing prices in 70 large and medium-sized cities from 2007 to 2017, and on the basis of controlling the covariates that can affect housing prices on the demand side and the supply side. The method of double difference is used to study the two rounds of purchase restriction policies, that is, in 2010, the first round of purchase restriction policies promulgated by local governments from 20111 and the second round of purchase restrictions promulgated in 2016 have their respective effects on residential commercial housing prices and price growth rates. The regression results of the benchmark fixed-effects model show that the implementation of the first round of purchase restriction policies in cities can significantly reduce the price of residential commercial houses, and the long-term effects of the purchase restriction policies are relatively weak. Because there may be a certain reverse causality between the implementation of the purchase restriction policy and the city’s housing prices, this paper introduces the lag value of the explained variable as the instrumental variable of the purchase restriction policy, and uses the dynamic panel instrumental variable method to perform regression analysis. In addition, there may also be the problem of sample selection bias, that is, for the difference between the treatment group and the control group, this article first uses the propensity score matching method to determine the appropriate covariate, and then matches the treatment group to the appropriate control group, And finally perform double-difference regression analysis to reduce the bias of sample selectivity. In the analysis of heterogeneity, this paper divides the samples according to the different conditions of housing prices and housing price growth rates, and verifies whether there is a difference in the impact of the purchase restriction policy on the cities with excessively high housing prices, rapid housing prices, and high and rapid housing prices. At the same time, we will return to cities in the eastern, central and western regions to explore whether there are regional differences in the effect of the purchase restriction policy. Finally, through a series of robustness tests, the robustness of the conclusions of this article is demonstrated.

Unintended Consequences of Demand-side Housing Policies: Evidence from Capital Reallocation

We empirically investigate how households reallocate their funds in response to an austere housing-market cooling intervention—the Housing Purchase Restriction (HPR) policy in China—that depresses housing demand. Based on a proprietary dataset on individual stock accounts from a large stock brokerage firm, we find a significant increase in new stock accounts opening and capital inflow to the stock market by the affected households immediately after the HPR implementation, which absorbs 54% of the capital that would have flowed into the housing market. The affected investors more likely steer capital toward investment in the listed real estate developers, a pattern that is prevalent across investor demographics and particularly strong in HPR cities with a higher pre-policy house price growth. The capital reallocation results in a significant trading loss for affected investors. We also find listed real estate developers, even the capital-constrained and more HPR-exposed firms, do not reduce corporate investment and employment despite the negative demand outlook.

Research on Traffic Congestion Based on System Dynamics: The Case of Chongqing, China

With the rapid development of society, urban traffic congestion has gradually become an important social problem that many cities need to solve. For Chongqing, traffic congestion not only affects residents’ normal travel but also brings more serious environmental pollution. Aiming at the problem of urban traffic congestion and automobile exhaust pollution, this paper adopts the system dynamics method to establish a model for studying urban traffic congestion system from the perspectives of private cars, trucks, and public transportation. First, we determine city motor vehicle trips as an indicator of the degree of traffic congestion in this paper. Second, we analyze the causal relationship between the growth of private cars, the travel of trucks, public transportation, population, and other factors and then build a model and test the stability of the model. Then, we add some practical policies to the model for policy analysis. Finally, it is concluded that the private car restriction policy is effective in controlling the amount of private car travel, and the purchase restriction policy controls the growth of the number of private cars from the root cause, but the development of public transportation is the most effective treatment measure in the long run.