A brief analysis of the dilemma China’s housing market encountered- the formation process of the domestic housing market and what course to follow

Abstract

This paper aims to discuss the dramatic impact of the pandemic on China’s housing industry and the underlying problems of the industry. Many seemingly strange circumstances happened in China, such as the continuously growing housing bubble and the housing prices that have not fallen in the recent decade. This paper uses the statistics collected by the authoritative data collection organization, the banks, and the housing agencies in Shanghai and the previous economics theory to briefly analyze China’s housing industry’s current situation and drawbacks and help explain the dilemmas as mentioned earlier. China’s housing market has its particularity, which makes it distinct from the markets in Western countries. This makes it hard to mechanically apply the old crisis theories to China’s market. Consequently, the actual situation, such as the government’s policy, must be taken into consideration- for example, in big cities, parking space prices rose even faster than housing prices. Different from ordinary economic analysis, the paper was written from the perspective of an ordinary citizen who had witnessed the growth of China’s housing market. For this reason, financial aspects and other aspects, such as the people’s livelihood and other industries, were considered. China’s housing bubble was gradually formed for many historical reasons, and its elimination will also take a long time. However, with our government and our people’s cooperation and coordination, it can be made sure that our market will be on the right track one day.