Research On The Impact Of Real Estate On The Allocation Of Family Risk Financial Assets

Homeownership and the allocation of risky financial assets is an important channel through which to increase people’s income from property and maintain and increase household wealth.Statistics show that housing assets play an important role among Chinese household assets,as only a very small proportion of households do not own a home and most households own one or more dwellings,while the allocation of risky financial assets among households is still very poor,as most households do not own risky financial assets.This suggests that the share of risky financial assets in the asset mix of Chinese households is generally low and the share of housing assets is high.In line with the requirement of "no speculation in housing",real estate has gradually moved away from its financial speculative character and returned to its residential character.This has inevitably led to a return to rational investment thinking among Chinese households and a decline in the proportion of Chinese households investing in real estate.In this context,examining the impact of real estate on the risk asset allocation of households can,on the one hand,explore the impact of changes in housing policy on real estate returns,thereby guiding households towards a philosophy of rational financial management,optimizing the asset allocation structure of households and improving the overall financial position of households;on the other hand,it can also contribute to the State Council’s goal of "promoting the sustainable and healthy development of China’s capital market".On the other hand,it also contributes to the State Council’s objective of "further promoting the sustainable and healthy development of China’s capital market".This article uses data from the third,fourth and fifth rounds of the China Household Finance Survey(CHFS),which were conducted nationwide in 2015,2017 and 2019.The CHFS was conducted in 2014,2015,and 2013 to examine the effects of three key independent variables-whether or not someone owns risky assets,the depth of risky asset distribution,and the width of risky asset distribution-using Probit,O-Probit,and Tobit models to empirically examine the effects of ownership on the distribution of households’ risky financial assets.The empirical results show that real estate has a significant negative impact on households’ risky assets,suggesting a crowding-out effect.Total household assets,household income,mortgage,female head of household,household head’s education,retirement,and risk preferences have significant positive effects on household risk asset allocation,while household debt,household head’s age,marriage,and happiness have significant negative effects on household risk asset allocation.If housing demand is simply a necessity for the first housing group or an investment for several housing groups,real estate has a strong crowding-out effect on the distribution of household risky assets.if housing demand is for a second housing group that is projected to be improved,real estate has no crowding-out effect on the distribution of household risky assets.The crowding-out effect of real estate on the distribution of households’ risky financial assets is heterogeneous.depending on the level of income,the crowding-out effect of real estate on the distribution of low-income households’ risky financial assets is largest.depending on the age of the household head,the crowding-out effect of real estate on the distribution of households’ risky financial assets first decreases and then increases,showing a U-shaped te Across regions and between urban and rural areas,the effect of property crowding out on the allocation of risky assets is strongest among households in the eastern region,and the effect of property crowding out on the allocation of risky assets is stronger among urban than rural households.In line with the findings of this paper,the following policy recommendations are made: we should pursue a firm policy stance of "no housing speculation",implement different housing policies for families with different characteristics,continue to improve support options for families to help them enter the real estate market to encourage the growth of families’ property income,and continuously optimize the allocation of resources in society.