The changing nature of household demand and housing market trends in China

China has consistently experienced 10% annual economic growth for about three decades and has became the second largest economy. As the monetary system of China is relatively closed and isolated the Chinese economy and its housing market has not been much affected by international financial crises. The chapter gives a brief overview of the development of the housing market and the evolution of housing policy in China. It also introduces the dramatic scale of recent house price inflation in the cities and explains government monetary policy toward dampening it down. The chapter assesses the potential reasons for the rise in house prices over the past decade including demographic factors, rising incomes and the role of capital markets and monetary policy. The analysis is based on five representative cities from different regions