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China’s Housing Market: Development Stages, Fluctuations and Risks


By Deng Yusong, DRC


This book gives an illustration of the typical characteristics of China’s housing market at different development stages, sets forth an in-depth analysis of the functional mechanism of the main housing policy tools and the risk types of the housing market and raises relevant policy options for warding off major market risks.

The book has five chapters. Chapter One: Development stages and fluctuations of the housing market. This chapter sums up the main factors causing fluctuations in the housing market, the relations between population size and the housing market performance and ways to address the fluctuations of the housing market in a typical economy. Chapter Two: The functional mechanism of the housing policy tools and relevant policy options. Issues discussed include the practice and revelation of typical economies, ways to draw on experience from foreign housing policy, China’s housing policies since 1998 and the assessment of the effects. It holds that the government needs to implement a neutral housing finance policy and real estate tax is not an ideal tool for real estate regulation. After explaining the regional differences and classified control of the housing market, it analyzes the major practice relating to the regulation of the supply-and-demand balance of commodity housing by Tianjin municipality, and puts forward some issues to be concerned in the establishment of a long-term mechanism in the housing market. Chapter Three: Risks in the housing market and countermeasures. It maintains that three types of real estate risks need to be distinguished and introduces the benchmark for judging housing price-income ratio, the reasonable housing price level and the normal price rise vs the bubbles. It comes up with some solutions to address excessively high housing price as well as the policy options on de-stocking and the establishment of an early-warning index system on monitoring market performance. Chapter Four: Government-subsidized housing projects and appropriate options. It touches upon the objectives and the general principles relating to government-subsidized housing projects and holds that the government needs to further flesh out relevant policies and the housing provident fund scheme for migrant population. Chapter Five: Analysis of China’s housing market performance and policy options. It narrows down to the fact that China has basically completed housing market adjustments whereas the U.S. is facing difficulties in resuscitating the normal performance of housing market. Before conclusion, the author hopes that the government needs to show more concern on major issues including appropriate evaluation of market performance based on a long-term mechanism.