Are House Prices Rising Too Fast in China?

Ashvin Ahuja, Lillian Cheung, Gaofeng Han, Nathan Porter and Wenlang Zhang
Additional contact information
Ashvin Ahuja: Asia-Pacific Department of International Monetary Fund
Lillian Cheung: Research Department, Hong Kong Monetary Authority
Gaofeng Han: Research Department, Hong Kong Monetary Authority
Nathan Porter: Asia-Pacific Department of International Monetary Fund
Wenlang Zhang: Research Department, Hong Kong Monetary Authority

No 1008, Working Papers from Hong Kong Monetary Authority

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.

Keywords: House price; price misalignment; financial stability; leverage cycle (search for similar items in EconPapers)
JEL-codes: E21 E22 G12 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2010-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (51)

Downloads: (external link)
http://www.hkma.gov.hk/media/eng/publication-and-r ... HKMAWP10_08_full.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hkg:wpaper:1008

Access Statistics for this paper

More papers in Working Papers from Hong Kong Monetary Authority Contact information at EDIRC.
Bibliographic data for series maintained by Simon Chan ( this e-mail address is bad, please contact ).