The impact of Covid-19 lockdown and re-opening on the housing market: evidence from China

This paper evaluates the performance of the housing market in China after the Covid-19 outbreak and subsequent economy re-opening. We construct both daily and weekly housing price indices for more than 30 cities by analyzing 600 thousand housing transaction data in 2019 and 2020. The empirical evidence shows that both the housing price and the number of transactions decrease sharply in the several weeks after the outbreak of the coronavirus, even after accounting for the effect of the spring festival. However, housing price and trading volume gradually return to the pre-outbreak level by the end of March, one month after the reopening of the economy. These results indicate that the negative shock of the new coronavirus on the housing market is likely to be temporary. Possible mechanisms are also explored.