Author: Naqun Huang，Jindong Pang, Yanmin Yang

Abstract:This paper investigates the effect of COVID-19 on both housing prices and housing price gradients in China using transaction level data from 60 Chinese cities. After using a difference-in-differences (DID) specification to disentangle the confounding effects of China’s annual Spring Festival, we find that housing prices decreased by two percent immediately after the COVID-19 outbreak but gradually recovered by September 2020. Moreover, our findings suggest that COVID-19 flattens the horizontal housing price gradient, reduces the price premium for living in tall buildings, and changes the vertical gradient within residential buildings. This is likely explained by the changing household preferences towards low-density areas associated with lower infection risk.

Key words: COVID-19; Housing prices; Horizontal housing price gradient; Building height; Vertical gradient.

This paper was published online in July 2022 in Journalof Urban Economics, A- journals of the School of Economics and Management, Wuhan University.

Paper link: https://doi.org/10.1016/j.jue.2022.103487