Impacts of administrative policy changes on housing prices: Evidence from the removal of China's housing purchase and resale restrictions

Since 2022, China's local governments have progressively lifted housing purchase (HP) and housing sales (HS) restrictions that had been in place for many years in an effort to stimulate local housing markets. In this study, using a large dataset of transaction data from Beike, we employ an event study approach to assess the impacts of these policy changes on secondhand housing prices. The results indicate that the removal of HP restrictions alone does not have any significantly effect on housing prices. However, the simultaneous removal of both HP and HS restrictions leads to a 3.1% reduction in housing prices, with a more pronounced effect observed for higher-priced properties. Additionally, we explore the mechanisms through which the removal of HP and HS restrictions affects housing prices, focusing on supply and demand dynamics in the secondhand housing market.