Climate Policy Uncertainty and Housing Dynamics: Evidence from China’s Major Cities. London. 24/09/2025.

CPRG held a research seminar, in which Professor Chyi Lin Lee from University of New South Wales shared his recent research on housing and climate change. The event was chaired by Dr Qiulin Ke from the Bartlett School of Planning.

As climate change intensifies, governments worldwide are introducing regulations, frameworks, and agreements to mitigate environmental risks. Yet, frequent shifts in climate strategies and ongoing international negotiations have created substantial climate policy uncertainty (CPU). Despite housing being the largest economic sector globally and a cornerstone of household wealth, its vulnerability to such uncertainty has received limited attention. This study examines the effects of the CPU on China’s housing market, the world’s largest carbon emitter, and a setting marked by dynamic policy shifts. Leveraging transaction data from 35 major Chinese cities spanning 2010–2022, we find that higher CPU is significantly associated with rising housing prices. The result aligns with growth options theory, suggesting that investors and homebuyers may act swiftly, rather than delay, when uncertainty is tied to potential future gains, such as benefits from climate transition policies. We further show that international agreements, like the Paris Agreement, shape domestic CPU by influencing public expectations and guiding local policy, amplifying housing market responsiveness to policy signals. Finally, we uncover heterogeneity across housing submarkets, with CPU exerting stronger effects in areas with superior carbon performance and higher exposure to physical climate risks. These findings offer critical insights for investors, policymakers, and urban planners seeking to navigate the interplay between climate policy and housing market dynamics.

Professor Chyi Lin Lee is an internationally recognised scholar in property and housing economics, sustainability, and real estate investment. He is a professor of property at the University of New South Wales, Sydney, where he has established himself as one of the highest-funded property researchers in Australia, having secured more than $4.3 million in external research grants. His research spans housing markets, climate change, PropTech, and the intersection of finance and the built environment, with a strong emphasis on policy relevance and industry collaboration. Professor Lee has published more than 85 journal articles in leading property and multidisciplinary journals, including Regional Studies, Housing Studies, Cities, Computers, Environment and Urban Systems, Habitat International, and the Journal of Real Estate Finance and Economics. His work is widely cited and has attracted significant media attention, with his research findings featured in major national and international outlets. He actively engages with industry and government, contributing evidence-based insights to inform housing and urban policy, as well as industry practice. He currently serves as the President-Elect of the International Real Estate Society, reflecting his leadership and standing in the global real estate research community.

Photos by CPRG