||Containing housing price inflation in China: is local intervention more effective than central intervention?
||China’s housing market has had 18 years of rapid price inflation. To prevent deterioration of affordability, from 2005 to 2013 the central government used a combination of administrative interventions and macro-economic measures to contain housing price rises. However, centrally formulated housing policies and intervention measures could not be fully implemented at local levels and thus have only limited short-term successes. From 2013, the central government retreated from direction intervention at the national level and left local governments to intervene to contain renewed rapid price hikes. This paper analysed demand and supply in China’s housing market and evolution of institutional arrangements that increase demand but distort supply using data obtained from fieldwork conducted in 2011 and 2013. It argues that localisation of intervention could be more effective than the one-size-fits-all approach adopted by the central government but reforms on institutional arrangements that prioritise high-end housing market and housing investors rather than owner occupiers are necessary to re-position the housing market to the middle class and ease affordability problems.
|Year of publication:
Cao, Albert (2014).
Containing housing price inflation in China: is local intervention more effective than central intervention?. 21st Annual European Real Estate Society Conference in Bucharest, Romania,