jats:sec<jats:title content-type="abstract-subheading">Purpose</jats:title>jats:pThis paper aims to examine the evolution of house prices in China and especially the effects of different financing channels on China’s house prices.</jats:p></jats:sec>jats:sec<jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title>jats:pThe author use the own theoretical framework and proceed to test the testable hypotheses by using the autoregressive distributed lag bounds test approach for cointegration analysis and the unrestricted error correction model. Quarterly time series data from Q1 2002 to Q2 2016 are used.</jats:p></jats:sec>jats:sec<jats:title content-type="abstract-subheading">Findings</jats:title>jats:pThe results suggest that in the short run, bank loans to real estate development and scale of shadow banking have significant positive effects on house prices. In the long run, the scale of shadow banking and disposable income affects house prices positively and significantly.</jats:p></jats:sec>jats:sec<jats:title content-type="abstract-subheading">Originality/value</jats:title>jats:pThis study provides more insights into how and to the extent different financing channels affect China’s house prices, particularly the impact of shadow banking on the house prices.</jats:p></jats:sec>