Difference in Housing Finance Usage and Its Impact on Housing Wealth Inequality in Urban China

Shan Yu and Can Cui
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Shan Yu: The Center for Modern Chinese City Studies, East China Normal University, Shanghai 200062, China
Can Cui: The Center for Modern Chinese City Studies, East China Normal University, Shanghai 200062, China

Land, 2021, vol. 10, issue 12, 1-16

Abstract: With the increasing importance of financial loans in home purchases in urban China, the role of housing loans in the accumulation of housing wealth needs to be unraveled. Using the data from the 2017 China Household Finance Survey (CHFS), this study investigates the use of housing loans and their impact on housing wealth inequality. It has been found that people with higher socioeconomic status and institutional advantages benefit more from housing provident fund loans and are more likely to fully invoke different financing channels to accumulate housing wealth. On the contrary, disadvantaged groups have to resort to costly market-based mortgages to finance their home purchases. This leads them to fall further behind in housing wealth accumulation. The spatial stratification of housing wealth accompanying the urban hierarchy was also observed and found to be closely linked to the type of housing loans. In this increasingly financialized era, relying on financial instruments in the process of household asset accumulation may further amplify the existing wealth inequality among social groups.

Keywords: home loan; commercial mortgage; housing provident fund; housing asset; housing inequality (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2021
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