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Housing Development and Urbanisation in China
Author(s) -
Yao Shujie,
Luo Dan,
Wang Jianling
Publication year - 2014
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12105
Subject(s) - economics , urbanization , speculation , inequality , economic inequality , china , virtuous circle and vicious circle , labour economics , development economics , government (linguistics) , economic growth , macroeconomics , geography , mathematical analysis , linguistics , philosophy , mathematics , archaeology
Rapid urbanisation and rising income have led to a strong demand for housing in urban C hina. However, housing development has been distorted by speculation, income inequality and lack of government support for low‐cost houses. In recent years, house prices become so high, making the vast majority of urban residents unable to afford, whereas rich families are able to buy many and leave them vacant. Income inequality is a major cause for rising house prices, which, in turn, exaggerates income inequality further. This vicious relationship has caused social tension between the rich and the poor and unhappiness among the middle‐ and low‐income groups. This paper discusses the factors responsible for the housing bubble in C hina and recommends appropriate policies to resolve this problem.