Testing for stationary of housing prices in China: An examination using efficient unit root tests

Abstract

Changes in housing prices affect all aspects of production and life, and have always been a hot spot of social concern. This paper uses the sequence panel selection method (SPSM) to study the time series properties of housing prices in 100 cities in China from June 2010 to December 2022. It is found that there are large differences in the stationary of housing prices in first/second/third-tier cities. Using the SPSM test method, it is found that housing prices in first-tier cities are all non-stationary series, the samples of second- and third-tier cities can be significantly divided into stable housing prices and non-stable housing prices. After further using the Fourier function to approximate the structural mutation of the data, more second-tier cities show stable housing prices, while less third-tier cities show stable housing prices. These findings provide an important decision-making basis for the government to implement regulatory policies according to local conditions based on the differential characteristics of changes in housing prices.

Keywords

• Housing prices
• Structural change
• Regional heterogeneity