A Tale of Two Countries: Comparing the US and Chinese Housing Markets

  • Rose Neng LaiEmail author
  • Robert A. Van Order


The recent surge in property values in China has been similar to the surge in the U.S before the crash in 2007. This raises concerns about whether China is destined to have a crash as well. We estimate similar models of property values for the two countries, in order to compare price dynamics side by side. We find little in common between them. In the U.S. the adjustment process appears prone to “bubbles” in the sense of strong momentum, but Chinese prices have been generally mean reverting, without momentum. This suggests that the recent price rise in China has had more to do with scarcity than with irrational exuberance.


Chinese housing market US housing market Bubbles Momentum (Pooled) mean group estimation 



We have received expert research assistance from Rui-Hui Xu. We thank Kelvin Wong, Man Cho, participants at the Real Estate Finance and Investment Symposium 2017 organized by the National University of Singapore, University of Cambridge, and University of Florida, and an anonymous referee for their helpful discussions and comments. This research is financially supported by the Research Committee of the University of Macau under the research project number MYRG2015-00085-FBA.


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© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of Finance and Business EconomicsUniversity of MacauTaipaChina
  2. 2.George Washington UniversityWashingtonUSA

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