China: An Evolving Housing Market

Author

Richard Lung

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June 30, 2005

In the late 1980s, China embarked on a series of reforms, which has significantly reduced the role of the state as provider of housing and allowed the re-emergence of a private housing market. For banks, this transition has opened up new avenues for loan growth. For individual households, the transition has created new investment opportunities while also providing, for at least some, a substantial increase in their standard of living. At the same time, the development of the real estate market has fed social discontent over widening inequalities. The government has responded through a series of measures to cool the market. This Asia Focus report discusses evolving role of China’s housing market and its impact on Chinese banks.