Does city-county consolidation lead to regional integration of the housing market? Evidence from China

City-county consolidation is a common approach in metropolitan reorganization. This study examines its impact on the regional integration of the housing market in China through theoretical analysis and empirical evidence. Using a general equilibrium framework, we identify key mechanisms—economic and demographic agglomeration, and land supply—through which consolidation affects the housing market. Empirical analysis of city and district/county level data reveals that: (i) Consolidation increases land supply while having minimal impact on wages and population, resulting in a 4.9 % decrease in housing prices in consolidated cities. (ii) Housing prices increase by 3.1 % in previous county jurisdictions but decrease by 8.9 % in previous city jurisdictions. (iii) The negative effect is more pronounced in both prefecture-level and small cities. (iv) Economic and demographic agglomeration alongside land supply changes is the mechanism underlying these housing price dynamics. Our findings offer implications for administrative division adjustments and housing market stabilization.
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