Dissecting China's Property Market Data

Meiping (Aggie) Sun

World Economics, 2016, vol. 17, issue 1, 41-62

Abstract: This paper analyses Chinese property market data to evaluate recent trends in the market and to make prognoses for the future. It considers whether or not the existence of high prices and at the same time an enormous rise in residential supply in terms of floor space under construction means that there is a ``bubble'' in China's property market which may burst, similar to what happened in Japan in the early 1990s. Evidence that the price of new homes moves almost perfectly with sales of new residential floor space rather than with completed floor space suggests that the housing market is behaving normally and follows mini boom and bust cycles like other industries. The analysis finds that there are low maintenance costs for buyers after purchase due to the lack of annual property tax and negligible depreciation of bare-shelled housing units which limits the risk of default. Although recently developers are under pressure to raise more revenue mainly due to high interest-rate borrowing from shadow banks, the author considers that the probability of a systemic collapse of housing market is minimal given existing taxation systems, easing monetary policy and the continuing urbanization process.

Date: 2016
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldeconomics.com/Journal/Papers/Article.details?ID=633 (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:wej:wldecn:633

Access Statistics for this article

More articles in World Economics from World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE
Bibliographic data for series maintained by Ed Jones ().