The Driving Factors of China’s Housing Prices Pre- and after 2012

• DOI: 10.4236/jmf.2021.112015
• Publication Date: 2021-05-14T08:03:14Z
• Authors: Haishan Li; Ting Pan; Qianqian Tang; Zhengxun Tan
• Keywords: Explanatory power; Macro

While GDP and the money supply (M2), two key demand fundamentals of China's housing prices, shifted gears decelerated after 2012, prices maintained high growth rates, specifically during 2015-2018. To explain puzzling phenomenon, we use TVP-VAR model to compare time-varying features factors driving up prices. Our results depict interesting finding that before macro-fundamental such as M2 per capita were drivers But shadow banking had gained explanatory power alongside GDP.