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Are Housing Prices Rising Too Fast in China?

Author

Listed:
  • Ashvin Ahuja
  • Lillian Cheung
  • Gaofeng Han
  • Nathan Porter
  • Wenlang Zhang

Abstract

Sharp increase in house prices combined with the extraordinary lending growth in Mainland China during 2009 has led to concerns of an emerging real estate bubble. We find that, for China as a whole, the current levels of house prices do not seem significantly higher than would be justified by underlying fundamentals. However, there are signs of overvaluation in some cities’ mass-market and luxury segments. Unlike advanced economies before 2007-8, prices have tended to correct frequently in China. Given persistently low real interest rates, lack of alternative investment and mortgage-to-GDP trend, rapid property price growth in China has, and will continue to have, a structural driver. [HKMA WP10_08] [http://www.info.gov.hk/hkma/eng/research/working/pdf/HKMAWP10_08_full.pdf

Suggested Citation

  • Ashvin Ahuja & Lillian Cheung & Gaofeng Han & Nathan Porter & Wenlang Zhang, 2011. "Are Housing Prices Rising Too Fast in China?," Working Papers id:3646, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:3646
    Note: Institutional Papers
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    References listed on IDEAS

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