Working Paper #735
The Sustainability of China’s Residential Market
James MacDonald · Rand Sobczak · Francesco Mussita
China Investing Political Risk
Many argue that its development has been built on a number of structural flaws and a housing bubble may be on the verge of bursting. Rapid price growth has resulted in a large proportion of the population being priced out of the market and the economy dependent on the industry’s stability. The authors assess the short- and long-term sustainability of the Chinese housing market by examining the economic, social and political elements that have shaped it. The findings suggest that despite the short-term risks that have emerged from recent government regulations, these policies have addressed many of the factors that have brought an industry in its infancy to a possible bubble. As fundamental drivers of the industry fade, the overall health of the sector rests on the successful execution of these initiatives.