Heterogeneity and dynamics in China's emerging urban housing market: two sides of a success story from the late 1990s

Abstract

China's emerging housing market plays a pivotal role in the ongoing economic reforms. The complete abandonment of the socialist housing allocation system in the late 1990s has led to profound changes in housing provision and consumption in urban China. This paper, through analysis of 2000 Chinese census data and other comparable data sets, studies housing trends in urban China and in its four autonomous municipalities in the late 1990s. It is found that urban homeownership increased dramatically and urban housing conditions improved by almost all accounts, while housing gaps were widening. Occupation and education became much more deciding factors in housing distribution. Both intra- and inter-municipality disparities in housing quality were evident, due in part to the differences in the reform measures undertaken. The drastic changes in the housing sector manifest the phenomenal socioeconomic changes as a result of 20 years’ economic reforms. Housing reform seems to be successful in increasing distributional inequality as a way to introduce market-based incentives and improve productivity. However, those who were in power appear to have maintained and extended their advantages in the new system. Therefore, while the market is in the making, demographic and institutional factors instead of economic factors are more relevant in housing provision and residential behavior.