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Difference in Housing Finance Usage and Its Impact on Housing Wealth Inequality in Urban China

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  • Shan Yu

    (The Center for Modern Chinese City Studies, East China Normal University, Shanghai 200062, China
    Research Center for China Administrative Division, East China Normal University, Shanghai 200062, China
    School of Urban and Regional Science, East China Normal University, Shanghai 200062, China)

  • Can Cui

    (The Center for Modern Chinese City Studies, East China Normal University, Shanghai 200062, China
    Research Center for China Administrative Division, East China Normal University, Shanghai 200062, China
    School of Urban and Regional Science, East China Normal University, Shanghai 200062, China)

Abstract

With the increasing importance of financial loans in home purchases in urban China, the role of housing loans in the accumulation of housing wealth needs to be unraveled. Using the data from the 2017 China Household Finance Survey (CHFS), this study investigates the use of housing loans and their impact on housing wealth inequality. It has been found that people with higher socioeconomic status and institutional advantages benefit more from housing provident fund loans and are more likely to fully invoke different financing channels to accumulate housing wealth. On the contrary, disadvantaged groups have to resort to costly market-based mortgages to finance their home purchases. This leads them to fall further behind in housing wealth accumulation. The spatial stratification of housing wealth accompanying the urban hierarchy was also observed and found to be closely linked to the type of housing loans. In this increasingly financialized era, relying on financial instruments in the process of household asset accumulation may further amplify the existing wealth inequality among social groups.

Suggested Citation

  • Shan Yu & Can Cui, 2021. "Difference in Housing Finance Usage and Its Impact on Housing Wealth Inequality in Urban China," Land, MDPI, vol. 10(12), pages 1-16, December.
    • Handle: RePEc:gam:jlands:v:10:y:2021:i:12:p:1404-:d:706075
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    References listed on IDEAS

    as
    1. Jie Chen & Feng Guo & Aiyong Zhu, 2009. "Housing Wealth, Financial Wealth and Consumption in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 17(3), pages 57-74, May.
    2. Justin P. Steil & Len Albright & Jacob S. Rugh & Douglas S. Massey, 2018. "The social structure of mortgage discrimination," Housing Studies, Taylor & Francis Journals, vol. 33(5), pages 759-776, July.
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