The Threshold Effects of Human Capital and Ageing Population on Housing Demand in China

This study investigates the threshold effects of human capital and an ageing population on the housing demand in China using a balanced panel data set of 31 provinces from 2002 to 2021. Unlike previous studies focusing on the linear impact, this study uncovers significant non-linear dynamics in how demographic factors influence housing demand. In alignment with conventional economic theories, we find a negative relationship between housing prices and demand, while income, urbanization and financial development positively influence housing demand. However, a counter-intuitive pattern emerges, where human capital is negatively related to housing demand, and this impact becomes more pronounced when the human capital surpasses its threshold. Additionally, the ageing population exhibits a positive relationship with housing demand, which strengthens when the human capital exceeds its threshold. These findings contribute to the literature by revealing a non-linear human capital–housing demand nexus and offer nuanced insights into demographic transitions, which provide practical implications for urban planners and policymakers seeking to align housing supply with shifting socio-demographic dynamics.