The Political Incentives Behind China’s Rising Housing Prices

Although previous studies have documented the impact of various factors on the prices of commercial housing in China, there remains a paucity of knowledge regarding the influence of the tenure length of Chinese officials during their incumbency. I address this gap by analyzing fluctuations in the prices of commercial housing in China during officials’ terms of office. The report proposes that during the tenure of a municipal party secretary, housing prices show a yearly upward trend in line with the extension of the term. The report’s empirical analysis draws upon a dataset, matching the prices of commercial housing from 2010 to 2017 with the tenure of serving Chinese municipal party secretaries. The report demonstrates a significant tenure effect: the prices of commercial housing increase over time within the term of a municipal party secretary. Furthermore, this tenure effect is also pronounced in sub-provincial-level cities.