Housing wealth growth and retirement decisions among older homeowners in China

Housing wealth constitutes a central pillar of retirement security in China, where homeownership among older adults is nearly universal and real estate dominates household asset portfolios. This study investigates how growth in housing wealth influences retirement decisions, leveraging regional variation in home value growth driven by local fiscal incentives and geographic constraints on land supply. Using nationally representative data from the China Health and Retirement Longitudinal Study (2011–2018) and an instrumental variable approach, we find that a 10-percentage-point increase in home value growth raises the probability of retirement by 1.32 percentage points among homeowners aged 45 and above. Mechanism analysis provides evidence consistent with both the traditional wealth effect and the precautionary buffer effect, while offering little support for a home equity effect. These findings suggest that housing wealth functions not only as a retirement asset but also as an important source of retirement security and later-life well-being in aging societies where formal retirement protection remains incomplete.