Do bank loans and local amenities explain Chinese urban house prices?

Based on Chinese city-level data from 1999 to 2012 and controlling for geological, environmental, and social diversity, our multi-step estimation suggests that credit plays a significant role in driving up house prices after the Great Recession, whereas property prices only influence bank lending before 2008. Local amenities such as higher education, green infrastructure, healthcare, and climate also positively affect house prices. Moreover, the impacts of bank loans on housing prices tend to be related to the level of amenities, suggesting that pooling macroeconomic and urban economic data may be important for housing market research in the future.