(1)Real house price growth has been high, averaging 10% per annum since 2004. However, there is substantial heterogeneity across markets, ranging from 3% (Jinan) to 20% (Beijing). House price growth is driven by rising land values, not by construction costs. Real land values have risen by over...

This paper establishes a theoretical and empirical link between the use of aggressive mortgage lending instruments, such as interest only, negative amortization or subprime, mortgages, and the underlying house prices. Such instruments, which come into existence through innovation or financial...

This paper establishes a theoretical and empirical link between the use of aggressive mortgage lending instruments, such as interest only, negative amortization or subprime, mortgages, and the underlying house prices. Such instruments, which come into existence through innovation or financial...