Supply-Demand Balance In Urban China's Housing Market: Measurement And Determinants

In the past few years,there is a continuously intensifying differentiation in residential housing markets over cities in China.On the one hand,housing markets in several cities are so prosperous and boisterous that the housing price keeps rising rapidly;while on the other hand,the high inventories of housing causes housing market sluggish in some cities.In China,housing oversupplies and undersupplies co-exist and disequilibrium in housing markets is eager to be solved.Based on this situation,the current dissertation would firstly measure and evaluate the proportion of incremental housing supply and demand;then,determinants towards equilibrium housing markets which are relevantly controllable by the government are introduced and discussed.Following literature reviews as well as theoretical analyses,quantification of market equilibrium consists of two aspects,the scale and the structure of housing supply and demand.The result of quantification would be used for calculating the incremental housing supply-demand ratio of urban China.In order to achieve the scale of housing balance,empirical studies on land supply and housing demolition has been conducted.This allows the author to reveal the la nd supply function under different government behaviors and natural constraints,hence to estimate the influences of housing demolition on passive housing demand.The structure of housing balance starts with housing area,housing area would be a major clue to investigate the differences between the housing supply and demand structures.The current dissertation has come up with four major conclusions.Firstly,the incremental housing supply-demand ratio is 84.74% between 2001 and 2010 in China,and it then had increased to 120.69% between 2011 and 2014,which indicates that the residential market has turned from the undersupply into oversupply.Secondly,the great differences between the incremental housing supply-demand ratio over cities become the core factor to determine the fluctuation of local market price and inventory.Thirdly,not only the geographical restraint but also the government behavior could be decisive on land supply.Especially,the promotion of local officials is more influential than housing price on the supply of land,which implies that land supply decision-making of local government might not be rational.Fourthly,the volume of urban housing demolition in China has been estimated,and showing that there were over 34 million housing units had been demolished in urban China from 2000 to 2010.The predictions suggest that the volume of housing demolition tends to be stable,or even slightly decrease in 2010-2020.Lastly,housing price may be the main reason that causes the unbalance in housing structure.As the housing price goes up,the developer would tend to supply large-sized houses for higher profit,while the home buyer would tend to purchase small-sized house due to lower affordability.