China and international housing price growth

Abstract

We document the Chinese effects on international residential property price growth. We show housing prices grow faster following decline in growth of China’s gross domestic product, increases in China’s savings rate, or rise in China’s risks. These results are consistent with the notion of Chinese investing in overseas property markets when faced with less promising investment opportunities at home and when they have the means to invest offshore. These effects are stronger for countries where English is the primary spoken language, with better tertiary education quality, and that exhibit lower correlations between local property market price growth and China’s interest rate.