One decade of urban housing reform in China: Urban housing price dynamics and the role of migration and urbanization, 1995–2005

Abstract This paper explores the possible effects of rural–urban migration and urbanization on China’s urban housing prices through focusing on a critical decade in urban housing reform, from 1995 to 2005. Compared with other countries, China differs, to a certain extent, in migration and urbanization patterns due to its unique Household Registration System ( Hukou ) and huge population base. However, very few empirical housing studies have examined the role of rapid urbanization and massive rural–urban migration in affecting housing price dynamics in China. This paper analyses the changes over time in housing prices in each Chinese province and examines empirically the determinants of urban house price at national and regional levels using time-series and cross-sectional data. The study finds that the abolition of the policy on the provision of welfare housing in 1998 is an important milestone in Chinese urban housing reform, which resulted in the market-oriented urban housing provision system. When comparing the results from coastal and inland provincial analyses, it is found that coastal provinces encountered greater pressure and challenges in dealing with the accommodation of migrants who were mainly from inland provinces. In contrast, inland provinces have relatively less pressure from migrants. The results from this paper are also in agreement with the hypothesis that regional variations in the urbanization level would have impact on the price of sold commodity houses. The results from this microlevel analysis of housing price may inform the Chinese policy makers to re-evaluate China’s urban housing reform policies from the perspective of facilitating labor migration and urbanization.

[1]  Si‐ming Li,et al.  Commercial housing affordability in Beijing, 1992–2002 , 2006 .

[2]  D. Weil,et al.  The Baby Boom, the Baby Bust, and the Housing Market , 1988, Regional science and urban economics.

[3]  W. Alonso.  The Historic and the Structural Theories of Urban Form: Their Implications for Urban Renewal , 1964 .

[4]  Fulong Wu.  Changes in the Structure of Public Housing Provision in Urban China , 1996 .

[5]  Weiping Wu.  Migrant Housing in Urban China , 2002 .

[6]  S. Rozelle,et al.  Self-Employment with Chinese Characteristics: The Forgotten Engine of Rural China's Growth , 2006 .

[7]  The Baby Boom, the Baby Bust, and the Housing Market , 1989 .

[8]  Si‐ming Li,et al.  The Road to Homeownership Under Market Transition , 2007 .

[9]  K. Chan,et al.  The Hukou System and Rural-Urban Migration in China: Processes and Changes , 1999, The China Quarterly.

[10]  Laurence J. C. Ma,et al.  Urban Transformation in China, 1949 – 2000: A Review and Research Agenda , 2002 .

[11]  D. Dowall.  Urban Residential Redevelopment in the People's Republic of China , 1994 .

[12]  X. Zhang.  Privatisation: A Study of Housing Policy in Urban China , 1998 .

[13]  Si‐ming Li,et al.  Housing Consumption in Urban China: A Comparative Study of Beijing and Guangzhou , 2000 .

[14]  W. Clark,et al.  Housing Tenure Choice in Transitional Urban China: A Multilevel Analysis , 2002 .

[15]  Jianfa Shen.  Internal migration and regional population dynamics in China. , 1996, Progress in planning.

[16]  James Lee.  From Welfare Housing to Home Ownership: The Dilemma of China's Housing Reform , 2000 .

[17]  Si‐ming Li,et al.  Housing Tenure And Residential Mobility In Urban China , 2003 .

[18]  Yaohui Zhao,et al.  Rural Labour Flows in China , 2001 .

[19]  J. Kain.  The journey-to-work as a determinant of residential location , 1962 .

[20]  Youqin Huang.  Housing Markets, Government Behaviors, and Housing Choice: A Case Study of Three Cities in China , 2004 .

[21]  Kevin Honglin Zhang,et al.  Rural-urban migration and urbanization in China: Evidence from time-series and cross-section analyses , 2003 .

[22]  W. Wheaton,et al.  Housing Market Dynamics and the Future of Housing Prices , 1994 .

[23]  J. Lin,et al.  Regional Inequality and Labor Transfers in China* , 2004, Economic development and cultural change.

[24]  A. Murie,et al.  Housing policy and practice in China , 1998 .

[25]  L. Zhou,et al.  Rural-to-urban migration in China. , 1996, Asian-Pacific economic literature.

[26]  G. Tolley.  Urban housing reform in China : an economic analysis , 1991 .

[27]  Youqin Huang,et al.  A Room of One's Own: Housing Consumption and Residential Crowding in Transitional Urban China , 2003 .

[28]  Alan Murie,et al.  The Process of Commercialisation of Urban Housing in China , 1996 .

[29]  Haibin Zhu,et al.  What Drives Housing Price Dynamics: Cross-Country Evidence , 2004 .

[30]  Joseph Gyourko,et al.  Urban Growth and Housing Supply , 2005 .

[31]  A. Murie,et al.  Commercial Housing Development in Urban China , 1999, Urban studies.

[32]  R. Muth,et al.  Cities and Housing. , 1970 .

[33]  Ya Ping Wang.  Urban Housing Reform and Finance in China , 2001 .

[34]  Fei-ling Wang.  Reformed Migration Control and New Targeted People: China's Hukou System in the 2000s , 2004, The China Quarterly.

[35]  James M. Poterba,et al.  House Price Dynamics: The Role of Tax Policy , 1991 .

[36]  Laurence J. C. Ma,et al.  China's Urbanization Levels: Reconstructing a Baseline from the Fifth Population Census , 2003, The China Quarterly.

[37]  R. Hays,et al.  The Transformation of the Urban Housing System in China , 1996 .