• Korea Real Estate Review
• /
• v.27 no.1
• /
• pp.33-44
• /
• 2017

The continuously rising housing prices in major Chinese cities have raised question about whether inflation is the main reason to drive up housing price to skyrocket in recent years. Based on the provincial panel dataset of China from 2006-2014, this paper investigates the impact of inflation on Chinese housing markets within the frameworks of both static and dynamic panel data models. Our empirical results show evidence that inflation has indeed been a main force of accumulating housing bubbles in these housing markets, especially in eastern region of China. We also find an interesting phenomenon in which Chinese housing bubble is, to a certain extent, affected by market self-adjustment mechanism.