Dissertation > Economic > Economic planning and management > Urban and municipal economy > Municipal economic profiles of countries in the world cities > China > Urban Economics and Management

The Impact of the Construction of Affordable Housing on the Commercial Housing Price

Author WangWei
Tutor LuoXiaoLing
School Central South University
Course Finance
Keywords affordable housing land extrusion rigid demand VAR model
CLC F299.23
Type Master's thesis
Year 2012
Downloads 46
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Since the housing market reform in China in1998, the real estate obtained a larger development, and has become to be the Mainstay industry of China. But with the contradictions of commercial housing prices and the structure of supply and demand, housing problems began to stand out. The high prices not only produced a real estate bubble, but also had a huge impact on people’s livelihood issues. The government takes great attention to this problem and repeatedly Macro-control the real estate market prices rapidly. But the price was retaliatory rose after each regulation. The governments gradually award that the lack of affordable housing is the reason of high property prices and rigid demand support the price of commercial housing.Based on this the governments began to vigorously advocate the construction of affordable housing, planning a huge amount of affordable housing construction task. Affected by our land using and housing surport system, such a large-scale construction of affordable housing is bound to affect the real estate market. However, controversy rising about the impact is positive or negative in the academic community. This article view this effect from the angle of affordable housing, take the impact of two aspects (land extrusion, rigid demand absorption) into account and Establish a vector auto regression (VAR) model to test such effects. The empirical results show that the impact of both sides is negative and the land side effect is lasting; massive construction of the affordable housing would cause the price of commercial housing rose in the long run.Therefore, the construction of affordable housing can not be achieved in short time; it must be the promotion step-by-step. And if the government wants to solve the housing problem in China, it must gradually establish a two-track system supply mode——the supply of affordable housing mode for low-and middle-income families and the supply of commercial housing mode for high-income families.

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