Population Migration In The Context Of Urbanization And Housing Demand

Since the reform of housing system in 1998, the urbanization in China has been developing rapidly. Along with the deepening of urbanization, an important emerging issue is imbalance between supply and demand of the housing market, especially in Beijing, Shanghai, Guangzhou and other big cities. How does this come? As pointed by Engels in On the housing problem, "When an ancient civilized country transferred from the small workshops of handicrafts to large industrial production, and this transition even speed up because of the extremely smooth situation, most probably, it was a period when there was the lack of housing. It is because on one hand, the people originally working in the agricultural labor were attracted to large cities as industrial centers; on the other hand, the layout of the old city did not fit for the new conditions of industrialization and the corresponding traffic needs." Viewed in the histories of the developed countries, when the income per capita is 1000 dollars, the housing problem is most prominent.The word urbanization includes multi-level changes like the social, cultural, economic and lifestyle, of which the most important is the migration of people, from rural to urban and from small cities to big ones. According to the report of McKinsey in 2008 entitled Meeting the country's 10 million urban army, by 2025 there will be 221 cities with population more than 1 million,23 cities with more than 5 million and eight mega-ones with populations over 10 million in China.In this context, how does the gathering of large-scale people affect the housing demand?Why does the imbalance of supply and demand exist? How much potential demand will the migration of population bring in the end?How much is effective demand supported by purchasing power?What is the future trend of migration of population, and what about the impact on housing? With these questions, this paper discussed the forecasting model and approach of residential housing demand based on the new classical utility theory of housing, the empirical analysis of Shanghai as well as the trends of population size and households. In cases when parameters are in different values, the paper forecasted, respectively, the total amount of potential demand and effective demand, contrasted the difference between the two and analyzed the reasons. At last, the paper draw out a conclusion that, it is the huge amount of potential demand that makes the supply being short, so price can be pushed high with the help of speculations; however, the current price rising rapidly weakened consumer purchasing power, which makes the effective demand far less than potential demand. This is how the conflicting phenomenon exists. At the end of the article, suggestions and a solution for the problem will be proposed.