Measuring Housing Affordability in Beijing

Housing affordability is the relationship between households’ income and housing expenditure. The public are very concerned about the high price of residential housing in Beijing, which is considered go beyond the income of average citizens. In order to fully understand the China’s real estate market, the paper first analyses the land policy, housing reform and housing finance, etc. Then this paper examine to what the extent the high housing price had led to low levels of housing affordability from 2000 until 2009 among Beijing urban households. The ratio analysis has been conducted to measure housing affordability. Meanwhile, we compute the housing-induced poverty, find maximum affordable housing prices for all the income classes, and suggest the housing assistance that should be provided to urban households in Beijing. Approximately, only 20% Beijing urban residents have purchase affordability for a standardized new residential housing, no matter which approach is used, strong statistical evidences reveal that there is an incessant large gap between residential housing prices and urban residents’ incomes in Beijing