DO MULTIPLE HOUSING BUBBLES EXIST IN CHINA? FURTHER EVIDENCE FROM GENERALIZED SUP ADF TESTS

This study examines whether the explosive behavior of housing prices or multiple housing bubbles exist in the 35 cities of China from 1998 Q1 to 2012 Q4, total of sixty quarters. The generalized sup ADF unit root test (GSADF) of Phillips, Shi, and Yu (2011a, 2013) and the ratios of housing price-to-income and housing price-to-rent are used to measure the explosive behavior of housing prices in China. The results reveal that two housing bubbles exist in 4 and 1 of 35 cities from the aspects of housing price to -income ratios and housing price-to-rent ratios, respectively. Wholly, the problems of the explosive behavior of housing prices are almost well-controlled in China from1998 Q1 to 2012 Q4.