Abstract
Purpose
From 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/approach
Based on a monthly data set between July 2011 and December 2019, this study adopts a cointegration analysis.
Findings
This study finds that household non-mortgage loans do play a significant role in driving residential real estate prices in China.
Originality/value
While 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.
Subject
General Economics, Econometrics and Finance
Reference69 articles.
1. 21 CNH (21st Century Business Herald) (2021), “查消费贷、经营贷流入楼市？广州银行业尚未收到监管要求, 但不排除跟进 To investigate the inflow of consumption loans and business loans into the property market? There have been no new regulatory requirements imposed on the banking industry in Guangzhou”, available at: https://finance.sina.cn/china/gncj/2021-02-03/detail-ikftssap2699427.d.html?cre=wappage&mod=r&loc=2&r=0&rfunc=75&tj=wap_news_relate (accessed 3 February 2021) (in Chinese).
2. Inside the black box: the credit channel of monetary policy transmission;Journal of Economic Perspectives,1995
3. Correlated independent variables: the problem of multicollinearity;Social Forces,1963
4. Chinese real estate market performance: stock market linkages, liquidity pressures and inflationary effects;The Chinese Economy,2014