Stabilizing China’s Housing Market

Richard Koss and Xinrui Shi

No 2018/089, IMF Working Papers from International Monetary Fund

Abstract: The sharp rise of house prices in China’s Tier-1 cities has fostered a great deal of commentary about the possibility of bubbles forming there. However, China’s unique housing market characteristics make it difficult to assess the macroeconomic severity of bursting bubbles, even if they exist. These include the setting of land supply and prices by the government, among many others. The presence of overbuilt “ghost cities” greatly complicates the ability of traditional macroeconomic policies to address these concerns. This paper looks at proposals to shore up the mortgage underwriting and legal infrastructure to help China withstand the impact of falling prices, should this occur.

Keywords: WP; guarantee company; government mortgage guarantee system; interest rate; mortgage lender; monetary policy; supply and demand; Housing; Mortgage; China; borrower default; default insurance; guarantee sector; delinquency rate; mortgage terms; mortgage guarantee company; mortgage enforcement; mortgage guarantor; mortgage guarantee sector; Mortgages; Housing prices; Residential mortgages; Land prices; Global (search for similar items in EconPapers)
Pages: 33
Date: 2018-04-13
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Citations: View citations in EconPapers (2)

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