A longitudinal analysis to the effect of real estate regulation policies in China: Evidence from microscopic perspective

Abstract

This paper tries to study the effect of real estate regulation policies longitudinally since China's housing system reform from the year 1998 from microscopic perspective. We established four Cox models, in which the time interval between interviewee's first job to his/her first homeownership was considered as the survival time; the monetary policies, tax policies, land policies and individual's social economic attributes were considered as covariates. The microdata from questionnaires in Harbin and macrostatistics from statistics authorities were adopted to estimate the model. We found that the adjustment of interest rate would influence the behaviors of potential home buyers. The raise of interest rate would reduce their home buying probabilities at each time point. The implementation of restraining business tax policies on house transfer stage would restrain the behaviors of first home buyers in the same year and one year later. The encouraging business tax policies' positive effect appears one year later while plays a negative role in the same year. On land policies, the result showed that the acceleration of land supply would push the potential home buyers to trade, but contrary. Differentiated credit loan policy can protect the first time house buyers' benefit effectively. The raise of concessionary proportion of first house's loan interest rate for the first house positively influences the interviewees' probability of first homeownership. Therefore we suggest that the government should continue to implement and deepen the differentiated credit loan policy, ensure the level of housing land supply, but implement the policy of transitional tax with caution, preventing the cost transferred.