Why do housing prices grow rapidly in China in recent years?
Abstract
According to the Chinese Academy of Social Sciences, 85% of China’s population cannot
afford to buy an apartment nowadays, with the housing prices continuously rising year by
year. What exactly are the factors to result in this embarrassing situation in recent years? Is
there any solution to solve the problems? ——What I’m talking about will surely make it
clear to you that why Chinese housing prices grow rapidly in recent years.
Key words
Housing prices, rapid growth, China.
Introduction
Dating back to August 31st , 2004 when Chinese government revised the law named [1]
which took effects from August 28th , 2004, it seemed to be the beginning of the rapid
growth of Chinese housing prices, lasting until now. In the law, the Chinese government
limits the use of land by pointing out a regulating “使用土地的单位和个人必须严格按照
土地利用总体规划确定的用途使用土地” [2]. The law has been regarded as the critical
reason for the rapid growth of housing prices, however, there are also some other reasons
like the rising cost of land and buildings, people’s constant demand for houses, the
shortages of Chinese economical system, speculative behaviors of buying a house, loose
credit policy, and bureaucratic control in the background.
The detailed analysis will be given below.
Literature review
Sorry, I can’t find the complete survey or analysis on the exact topic about rapid growth of
Chinese housing prices in recent years, but what I have read related to the topic more or
less, has been mentioned or introduced in my essay.
Discussion
Since the beginning of 21th century, China has developed its economics as much rapidly as
possible, which, in returns, make many social problems come into existence. In this
situation, the most common social problem that needs everyone pay enough attention to is
supposed to be the rising housing prices, influencing everyone’s basic individual benefits
in their daily life.
To learn how sharply the housing prices rise, here I want to show you some data given by
NBS [3] based on a survey about 70 cities’ continuous rising housing prices in the first half
year of 2010.
From January to May in 2010, the investment in the real estate development nationwide
amounted to RMB1.3917t, up 38.2% year-on-year. Among them, the investment in the
commercial residential buildings reached RMB964.3b, up 35.7% year-on-year, accounting
for 69.3% of the total. On the current month of May, the investment in the real estate
development stood at RMB398.5b, increasing RMB64.8b from the previous month, up
