Property Prices and Housing Affordability in China: A Regional Comparison

Jing Li, Ying Xu, Yat Hung Chiang

Research output: Journal article publicationJournal articleAcademic researchpeer-review

8 Citations (Scopus)

Abstract

This study explores two issues related to China's property market dynamics. First, it examines how regional property price disparity is caused by space and capital market differentials, based on the Four-Quadrant Framework. With the panel data fixed effect model of 35 major cities from 2002 to 2012, it integrates regional factors, or the economic and demographic conditions in Quadrant I, into the Four-Quadrant framework. The empirical results suggest that in the coastal cities the capital market plays a bigger role in determining housing price while in the inner cities, the space market plays a bigger role. Second, the housing affordability indicator is modified by considering the impacts of household disposable income and urban population density on households' ability to purchase a home, which is in line with the first issue, to integrate economic and demographic conditions into investigating housing price dynamics. Comparing regional disparity, the eastern cities have higher housing affordability conditions than the central and western cities. The main reason is that the eastern cities have attracted human capital inflow from the central and western regions, resulting in a clustering effect for the coastal regions and a hollowing-out effect for the inland regions. The analysis has implications for investors and the government.
Original languageEnglish
Pages (from-to)405-435
Number of pages31
JournalJournal of Comparative Asian Development
Volume13
Issue number3
DOIs
Publication statusPublished - 1 Jan 2014

Keywords

  • data envelopment analysis
  • housing affordability
  • Property prices
  • regional comparison

ASJC Scopus subject areas

  • Sociology and Political Science
  • Economics and Econometrics
  • Political Science and International Relations

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