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Are House Prices Rising Too Fast in China?
Author:
Mr. Ashvin Ahuja
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Lillian Cheung null

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Gaofeng Han null

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Mr. Nathan Porter
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Wenlang Zhang null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2010: Issue 274
Language:
English
Publication Date:
01 Dec 2010
DOI:
https://doi.org/10.5089/9781455210817.001
ISBN:
9781455210817
ISSN:
1018-5941
Pages:
31
Keywords:
WP; benchmark price; house price; property price; price misalignment
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Sharp increase in house prices combined with the extraordinary Chinese lending growth during 2009 has led to concerns of an emerging real estate bubble. We find that, for China as a whole, the current levels of house prices do not seem significantly higher than would be justified by underlying fundamentals. However, there are signs of overvaluation in some cities’ mass-market and luxury segments. Unlike advanced economies before 2007-8, prices have tended to correct frequently in China.Given persistently low real interest rates, lack of alternative investment and mortgage-to-GDP trend, rapid property price growth in China has, and will continue to have,a structural driver.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund