In order to curb the soaring house prices, the Chinese government has been focusing on macro-control of real estate on the demand side. Among them, the Home Purchase Restriction (HPR) is one of the most commonly used policy tools, and its influence has attracted the attention from both the public and the academia. Although many scholars have studied the effectiveness of the home purchase restriction policy, there is no universal conclusion and the empirical research on the externalities of this policy is scarce. Based on the daily transaction micro-data of the real estate sales market, the rental market and the land market, this paper uses the difference-in-difference model to evaluate the effectiveness of the HPR more accurately, further integrates the relevance of each market into the analytical framework and explores the externalities of the HPR on the real estate rental market and the land market. The empirical results show that the HPR lowers the house price by 10.12%, which is higher than the estimation results of previous studies; and increases the rent by 25.09%, while decreases the residential land price by 9.08%, with no significant impact on industrial and commercial land prices. A series of robustness tests and
counterfactual analysis, such as PSM-DID, all support the reliability of the empirical results. The externalities of the HPR indicates that the policy is not conducive to improving the welfare of people with the rigid housing demand, and may trigger the "soft resistance" of the local government. Therefore, the government should focus on how to promote the supply-side structural reform on the land market and real estate market on the basis of strengthening the local tax system.
Keywords: home purchase restriction, policy effectiveness, policy externalities, difference-in-difference model
China Finance and Economic Review
Volume 8 Number 2 Summer 2019.P47