Is There A Housing affordability in China

Based on the shelter poverty measure, this paper contributes to resolving the upper bound of the percentage of income. Using the housing market data of 35 large and medium cities in China, this paper examines the housing affordability difficulties by computing housing user cost. The statistical analysis shows that the cities in question do not have severe housing affordability issue as a whole. The empirical findings exhibit that the house price has played a more important role in housing affordability than household income. Secondly, the magnitude of housing possession has exerted a great impact upon housing affordability. Accordingly, developing more affordable houses is the most effective approach to mitigate the housing affordability issue in China over the current period. Thirdly,I find that the origination year of the housing reform significantly alleviates the housing affordability issue. Fourthly, the discrepancies of the housing affordability between cities do not derive from the differentials of the population growth rate. Finally, the housing affordability does not show the conspicuous disparities across geographic locations.