Demystifying the Chinese housing boom

Hanming Fang, Quanlin Gu, Wei Xiong, Li An Zhou

Research output: Contribution to journalArticlepeer-review

171 Scopus citations


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%. 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.

Original languageEnglish (US)
Pages (from-to)105-166
Number of pages62
JournalNBER Macroeconomics Annual
Issue number1
StatePublished - 2016

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics


Dive into the research topics of 'Demystifying the Chinese housing boom'. Together they form a unique fingerprint.

Cite this