Is China’s Housing Overpriced?

WU Jing1( 吴璟 ) and LIU Hongyu2( 刘洪玉 )
12Institute of Real Estate Studies, Tsinghua University

Editorial note:

Surging real estate price in China over recent years has aroused much concern. In the views of many, property prices have risen beyond the level
ordinary people can afford. This article, however, maintains that a high property price-to-income ratio does not necessarily lead to the conclusion that price bubbles have appeared in the realty market. From an overall perspective, current property prices in most cities are reasonable, and the problem occurs only in a few cities. Housing difficulties for urban dwellers are mainly twofold: low affordability of down payment by first-time homebuyers, and low affordability by low-income and medium low-income households.

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