Effect of the Xiong’an New Area Policy on the Real Estate Market in Beijing

Abstract

The establishment of the Xiong’an New Area has been an important decision for China to remove noncapital functions. This paper will use the Xiong’an New Area policy as a quasi-natural experiment and will use the synthetic control and difference-in-difference (DID) methods to study the influence of the establishment of the Xiong’an New Area on the quantity and prices in the new and secondhand housing markets in Beijing. This paper found that after the Xiong’an New Area was established, the overall quantity of new houses in Beijing decreased and the quantity of secondhand houses first increased and then decreased. The price of new housing increased steadily and the price of secondhand housing had a downward trend. Overall, the Xiong’an New Area policy had a significant influence on the quantity of new and secondhand housing and the prices of the new and secondhand housing index in Beijing. Based on the empirical results, to promote the rational development of Beijing’s real estate market through the Xiong’an New Area policy, and to achieve the national policy goal of “no speculation on housing” and “housing for housing the planning and construction in the area need to be strengthened.