TY  - JOUR
AU  - Fang, Hanming
AU  - Gu, Quanlin
AU  - Xiong, Wei
AU  - Zhou, Li-An
TI  - Demystifying the Chinese Housing Boom
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 21112
PY  - 2015
Y2  - April 2015
DO  - 10.3386/w21112
UR  - http://www.nber.org/papers/w21112
L1  - http://www.nber.org/papers/w21112.pdf
N1  - Author contact info:
Hanming Fang
Department of Economics
Ronald O. Perelman Center
for Political Science and Economics
133 South 36th Street
Suite 150
Philadelphia, PA 19104
Tel: 215-898-7767
Fax: 215-573-2057
E-Mail: hanming.fang@econ.upenn.edu

Quanlin Gu
Guanghua School of Management
Peking University
Beijing 100871
CHINA
E-Mail: linng@gsm.pku.edu.cn

Wei Xiong
Princeton University
Department of Economics
Bendheim Center for Finance
Princeton, NJ  08450
Tel: 609/258-0282
Fax: 609/258-0771
E-Mail: wxiong@princeton.edu

Li-An Zhou
Guanghua School of Management
Peking University
Beijing 100871
CHINA
E-Mail: zhoula@gsm.pku.edu.cn
M1  - published as Hanming Fang, Quanlin Gu, Wei Xiong, Li‐An Zhou. "Demystifying the Chinese Housing Boom," in Martin Eichenbaum and Jonathan A. Parker, editors, "NBER Macroeconomics Annual 2015, Volume 30" University of Chicago Press (2016)

M2  - featured in NBER digest on 2015-07-02
AB  - We construct housing price indices for 120 major cities in China in 2003-2013 based on sequential sales of new homes within the same housing developments. By using these indices and detailed information on mortgage borrowers across these cities, we find enormous housing price appreciation during the decade, which was accompanied by equally impressive growth in household income, except in a few first-tier cities. While bottom-income mortgage borrowers endured severe financial burdens by using price-to-income ratios over eight to buy homes, their participation in the housing market remained steady and their mortgage loans were protected by down payments commonly in excess of 35 percent. As such, the housing market is unlikely to trigger an imminent financial crisis in China, even though it may crash with a sudden stop in the Chinese economy and act as an amplifier of the initial shock.
ER  -