Zan Yang

Impact of Urban Economic Openness on Real Estate Prices: Evidence from Thirty-Five Cities in China

Over the past decade, Chinas major cities have experienced significant real estate price increase which has been fueled by the sustained growth of the economic fundamentals. It is well believed that deeper integration with the world market is one of the major reasons for such high speed macroeconomic growth. In this paper, we examined the linkage between urban economic openness, the ratio of trade volume as a percentage of GDP, and urban real estate prices basing on the quality of life theory as well as Balassa-Samuelson (B-S) effects. Using panel data of 35 large Chinese cities from the year 1998 to 2006, we empirically find that for every 1% increase in urban economic openness, urban real estate prices will increase significantly by 0.282%, after controlling for other traditional demand-supply factors. Urban economic openness alone accounted for about 15.90% appreciations of Chinese real estate prices during the sample period, which is not neglectable. This result implies that urban real estate price fluctuations are potentially affected by international economic factors. The economic distance to the international market could be deemed as productive and consumption amenity for a city as well. This study enriches the perception of quality of life factors, and furthermore provides a new perspective for understanding the real estate price dynamics in the globalized economic development today.

The New Chinese Model of Public Housing: A Step Forward or Backward?

After three decades of housing reform, Chinese government embarked on a large-scale expansion of public housing provision over the last few years. This very ambitious plan of public housing construction aims at reducing the negative impacts from global economic slowdown since 2008; at the same time, tackling the huge inflation in and achieve the harmonious society development strategy. This initiative signals a sharp change in housing policy from that in previous decades. It also put China on a different track in housing provision when many other countries tried to cut back public spending to maintain economic stability. This paper aims to provide a timely analysis of the recent resurgence of public housing sector in urban China by examining the policy framework, the new structure of provision, and the driving forces behind this new initiative. We will also assess the similarities and differences of this approach from the Chinese pre-reform housing system and public housing practice in other industrialized countries.

The impact of privatization of public housing on housing affordability in Beijing: An assessment using household survey data

Housing affordability has long been on the agenda of China’s policy makers. Imperfections in the housing system and growing disparities in income and wealth have been central to the problem of affordable housing. Housing reforms in China led to the creation of a market-oriented housing system, but also increased economic and social stratification. This article considers the effect of privatization of public housing on the problem of housing affordability in Beijing. We draw on a household survey to assess affordability for households according to occupants’ family structures, educational attainments and employment status, using a ‘residual income’ approach. The implications for policies designed to improve housing affordability are discussed.

Estimating the market value of a proposed townhouse development

An appraisal by an accredited appraiser is often necessary before a proposed development can receive a commitment for financing from a financial institution. Such pre‐construction appraisals are often more difficult to complete than those where the subject property is already developed and accessible for inspection. In this article we are performing a valuation of a proposed townhouse complex prior to its construction. Hedonic estimation is used to estimate the market value of the proposed development. The estimated value of the complex as a whole, and of the individual units, is compared to the prices obtained as the townhouses were built and sold. Insights with respect to the feasibility of the approach for the estimation of the gross retail value of proposed developments are discussed.

The dynamics of Swedish national and regional house price movement

In this study, the recent persistent growth of regional house price pattern in Sweden is explained by the fundamental variables and the regional distributive perspective on household income and wealth are indicated to be important to understand the different level and development of regional housing market. We also discuss the long running relationship between house prices and migration flows and highlight its critical role on house price analyses.

Housing assets to the elderly in urban China: to fund or to hedge?

Abstract Housing has become the most important asset held by a large proportion of China’s older citizens. Therefore, the role of housing wealth in the consumption decisions of the elderly is a central topic of research and gains insights into the saving, investment and consumption decisions made throughout household life to meet later pension needs. In this paper, using data drawn from a household survey conducted between 2002 and 2009, we estimate the influence of housing wealth on the non-housing consumption of the elderly, and identify the mechanisms underlying this relationship. We find that on average, changes in housing wealth have limited effects on elderly consumption. However, we also find that the role of housing in consumption differs according to the income, health status, and living arrangements of the elderly. The paper draws attention to the influence of housing and its links with social and health-care systems on the lives of older people, with important policy implications.

Public Housing in Mainland China: History, Ongoing Trends, and Future Perspectives

China has a unique experience of public housing development. Before 1998, public ownership dominated the housing provision in urban China. Nonetheless, the employer-based welfare housing program was formally abolished in 1998, and the overwhelming majority of the public housing stock was quickly privatized. However, the Chinese government again committed to developing public housing in 2007, and a large-scale public housing construction program has been implemented since 2009. This chapter aims to first provide a summary of pre-reform and post-reform public housing development in China and then discuss why the Chinese government has again turned to public housing as a solution after about 30 years of housing reform and privatization. It shows that the recent push for public housing in China should not be seen as a step backward or as the restoration of the pre-reform welfare housing system. Instead, it represents the central authority’s increasing recognition of the complexity of urban housing systems in a modern market economy.

Shock Hunting: Effects of Regional-dependent, Regional-specific Shocks in the Swedish Property Market

Abstract The purpose of this paper is to evaluate housing price risks by examining the price diffusion process in different regions of Sweden. We model regional housing volatility as stemming from two sources: regional-specific shocks that reflect fundamental changes and regional-dependent shocks that reflect shocks in related regions. We evaluate the relative contributions of these two sources of regional price variations and measure shock persistence using multivariate modelling. Our results confirm the importance of price diffusion across regions and indicate that several influential regional prices are singled out as powerful determinants of regional heterogeneous volatility through direct and indirect influences.

Public Housing Programs and the Challenge of Household Affordability in Beijing

As China’s political, economic and cultural center, Beijing is a strong magnet for both population and industry. Due to rapid industrialization and urbanization, the city’s population has reached 20.2 million as of 2011 (Statistical Bureau of Beijing 2012), and built-up urban areas have grown to 1,425.9 km2 in 2011 (NBSC 2012). In addition, there have been massive urban renewals, shantytown rebuilding and new town development. The increased demand for housing has resulted in higher housing prices, and corresponding higher housing prices have grown in Beijing at a rate faster than the national average. The average price for commodity housing in Beijing increased 2.6 times from 2001 to 2009, while disposable income per capita increased only 2.4 times during the same period (NBSC 2000). This has created problems of low housing affordability and poor housing consumption, especially among low- and middle- income households. Severe housing problems are increasingly threatening economic stability in Beijing (Yang and Shen 2008; Yang and Wang 2011) and also widening social stratification between different cohorts (Yang and Wang 2011; Man 2011).