Housing wealth inequality in China: An urban-rural comparison

Abstract

Although China has witnessed remarkable increase in housing wealth and total household wealth in recent decades in both urban and rural areas, the housing inequality has grown significantly and urban-rural disparity remains substantial. While previous research has studied urban and rural housing separately, the overall pattern of housing inequality in China remains unexplored. Furthermore, it remains unclear how urban–rural housing inequality contributes to the widening urban–rural wealth gap. With the process of urbanization and new reforms in rural land policy, the housing markets of urban and rural areas are increasingly integrated. Therefore, a holistic understanding of housing inequality is needed. Analyzing data from the China Household Finance Survey (CHFS), this study first finds that urban–rural inequality is a non-negligible component of the overall housing wealth inequality and that the housing wealth inequality in rural China is higher than that in urban China. Secondly, the relatively higher marketization of housing in urban China helps urban households accelerate their wealth accumulation through higher capital gains, thus widening the household wealth gap between urban and rural areas. These findings have important policy implications for further housing reforms as well as for urban–rural integration.