Duration dependence of real estate price in China

The The main emphasis of this thesis is placed on the problem of duration dependence in Chinese real estate market. We probe data on real estate price at nationwide level and regional level. Making use of a panel of 30 provinces and autonomous regions, we examine the duration dependence in coastal and inland real estate market along with the overall Chinese real estate market. According to discrete time Survival model, the real estate price is divided into expansion and contraction phases. Survival model with a Logit characterization is adopted for real estate price expansion and contraction phases. This model is employed for all areas in our thesis. Major issues are addressed base on the models with and without standard real estate price determinant variables. The results support that Chinese real estate market has positive duration dependence in not only price expansion but also contraction phases since their phase-end possibility rise with duration. In addition, positive duration dependence appears in expansion and contraction periods of coastal region and inland region. Moreover, standard determinants of real estate price, such as CPI, land price, rental and completed building construction area are included as control variables. The results show that those variables have effect on hazard rate. However, the effects appear in different phases and with mixed sign. Government macro-control policies are effective to control the house price soar in real estate price expansion phases. In addition, CPI, house price expectation and mortgage rate affect the hazard rate in coastal area, but just in expansion and the signs of these significant determinants are mixed. For inland area, only completed building construction area in expansion has influence on hazard rate, besides, CPI affects hazard rate in contraction of inland area, and government policy is efficient to stimulate real estate consumption during the period of real estate price contraction.