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Liquidity constraints and speculation: Evidence from the housing-resale restriction policy in Qingdao, China

Accepted version
Peer-reviewed

Type

Article

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Authors

Wang, Xiaodong 
Yu, Shan 
Zhang, Li 

Abstract

This article seeks to explore the efficacy of the Housing-Resale Restriction (HRR) policy in curtailing housing speculation, complementing existing literature that primarily examines the impact of taxation. The HRR policy directly reduces speculative opportunities through heightened liquidity constraints. Employing the methodology of regression discontinuity in time (RDiT), this study analyzes the impact of liquidity constraints on housing price growth rates based on the monthly community-level data from Qingdao, China, where the HRR policy was the most stringent in terms of scope and holding time requirement. The results show that the HRR policy reduced housing price growth rates by 1.3881 to 2.1001 percentage points on average. Moreover, the disincentive impact was less pronounced in affluent, recently developed communities and those near subway stations. These findings provide valuable insights for policymakers to regulate the real estate market, mitigate excessive speculation, and prevent market bubbles.

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Keywords

Journal Title

Applied Economics

Conference Name

Journal ISSN

0003-6846
1466-4283

Volume Title

Publisher

Routledge

Version History

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2024-01-19 11:18:48
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2024-01-04 00:33:24
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