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Recent housing affordability in urban China: A comprehensive overview

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Listed:
  • Li, Keyang
  • Qin, Yu
  • Wu, Jing

Abstract

In this study, we provide a comprehensive overview of housing affordability in China from both the macro and micro perspectives. We extend the scope of housing affordability analysis to all Chinese cities based on a unique panel dataset in 275 Chinese prefecture cities from 2014 to 2018. We also make a novel methodological contribution to the literature by employing micro-level data from an anonymous major Chinese city in 2015. Our results suggest that the overall level of housing affordability in Chinese cities remained relatively stable or even improved during the sample period. However, we identify a few “superstar cities,” such as Beijing, Shanghai, Shenzhen, and Xiamen, which are associated with a serious housing affordability problem. This problem arises from both a shortage of supply in the space market and a potential mispricing in the asset market, and may have a spillover effect on surrounding cities due to home purchase restrictions in the superstar cities. Within these cities, the housing affordability problem leads to longer commuting time due to the separation of home and workplace, and lower housing space consumption for the residents.

Suggested Citation

  • Li, Keyang & Qin, Yu & Wu, Jing, 2020. "Recent housing affordability in urban China: A comprehensive overview," China Economic Review, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:chieco:v:59:y:2020:i:c:s1043951x19301233
    DOI: 10.1016/j.chieco.2019.101362
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    Keywords

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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation

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