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What Pushes Up China’s Urban Housing Price So High?

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  • Peng Li
  • Shunfeng Song

Abstract

Since the housing reform in 1998, real housing prices in China’s urban areas have increased 60 percent, much faster than the growth rate of disposable income. Consequently, the price-income ratio rose from 7.11 in 1998 to 15.37 in 2012, indicating a dramatic decrease in housing affordability. This article first describes the skyrocketing of China’s urban housing prices. It then discusses factors that led to the soaring housing prices, including institutional, cultural, and economic factors. Finally, the article examines recent government housing policies and their effectiveness. The article argues that removing the local government’s double monopoly powers and replacing taxes and fees at transactions with property taxes during possession could better control China’s fast growing housing price.

Suggested Citation

  • Peng Li & Shunfeng Song, 2016. "What Pushes Up China’s Urban Housing Price So High?," Chinese Economy, Taylor & Francis Journals, vol. 49(2), pages 128-141, March.
    • Handle: RePEc:mes:chinec:v:49:y:2016:i:2:p:128-141
    DOI: 10.1080/10971475.2016.1143306
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    Cited by:

    1. Shanggang Yin & Zhifei Ma & Weixuan Song & Chunhui Liu, 2019. "Spatial Justice of a Chinese Metropolis: A Perspective on Housing Price-to-Income Ratios in Nanjing, China," Sustainability, MDPI, vol. 11(6), pages 1-15, March.
    2. Wei Hu & Shanggang Yin & Haibo Gong, 2022. "Spatial–Temporal Evolution Patterns and Influencing Factors of China’s Urban Housing Price-to-Income Ratio," Land, MDPI, vol. 11(12), pages 1-15, December.
    3. Hu, Mingzhi & Su, Yinxin & Ye, Wenping, 2019. "Promoting or inhibiting: The role of housing price in entrepreneurship," Technological Forecasting and Social Change, Elsevier, vol. 148(C).
    4. Xiaoguang Liu & Jian Yu & Tsun Se Cheong & Michal Wojewodzki, 2022. "The Future Evolution of Housing Price-to-Income Ratio in 171 Chinese Cities," Annals of Economics and Finance, Society for AEF, vol. 23(1), pages 159-196, May.

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