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A Tale of Tier 3 Cities

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  • Kenneth S. Rogoff
  • Yuanchen Yang

Abstract

This paper provides new estimates of the housing stock, construction rates and price developments by city tier in China in order to understand where excess supply might be concentrated, and the implications of any significant contraction. We also update estimates of the size of China’s rapidly evolving real estate sector through 2021, allowing one to look at the initial impact of COVID-19, as well as extending the analysis to incorporate urban-expansion related infrastructure construction. We argue that China overall faces imbalances between supply and demand for housing stock, but the problem is significantly deeper in the generally smaller and lower income tier 3 cities, which nevertheless account for more than 60% of both China’s GDP and its housing stock.

Suggested Citation

  • Kenneth S. Rogoff & Yuanchen Yang, 2022. "A Tale of Tier 3 Cities," NBER Working Papers 30519, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30519
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    1. Chartbook #194 Can Beijing halt China’s housing avalanche? The most important economic-policy question for 2023?
      by Adam Tooze in Adam Tooze on 2023-02-05 21:37:56

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    1. Hefan Zheng & Rongjie Zhang & Xinru Yin & Jing Wu, 2025. "Unused housing in urban China and its carbon emission impact," Nature Communications, Nature, vol. 16(1), pages 1-13, December.

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    More about this item

    JEL classification:

    • F39 - International Economics - - International Finance - - - Other
    • G01 - Financial Economics - - General - - - Financial Crises
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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