The Impacts of Housing Affordability on Social and Economic Sustainability in Beijing

Abstract

China has undergone significant housing price growth since its 1998's policy reformation -triggering housing affordability issues in large cities such as Beijing and Shanghai. Although studies have been done to investigate Chinese cities' housing market policies, it appears that hitherto little is known about the effect of housing affordability on the cities' social and economic sustainability. The aim of this paper is to investigate the relationships among housing affordability, macro-economic performance and socio-demographic trends in Beijing. Under this aim, the specific objectives are to: examine Beijing's housing market performance, housing affordability, economic development and socio-demographic trends; and model the relationships among housing affordability, economic performance and socio-demographic trends in Beijing. Twelve years of retrospective census data from National Bureau of Statistics of China were collated and analysed. The results show that economic growth is positively influenced by housing affordability. However, it is shown that low level of housing affordability could lead to economic and social un-sustainability. This research informs urban planners and researchers about the effect of housing affordability on a nation's urban economic and social development, offering a new plausible insight towards developing a sustainable housing market.

Generating the New Dimensions of Social Sustainability into Sustainable Urban Development Policy

“…In the case of China, housing affordability is one prominent aspect of viewing an independent life. Therefore, the creation of family and marriage often would adjust on their compliance of housing situation (Wang, Han, & Lim, 2013). In short, housing affordability mainly affects a socially sustained society, because it frequently relates to the situation of housing market, household formation, the demographic changes, and household size structure (Copus & Crabtree, 1996;Singh et al, 2012;Wang et al, 2013).…”

“…In implementing spatial equality, social sustainability covers two major issues particularly in housing affordability and social cohesion. As mentioned earlier, the issue on housing affordability can be discerned from Beijing's experience of its tendency on losing city's attraction, due to the gradually increasing house price, making the condition of housing affordability worse, which would cause unsustainable demographics and population growth (Wang et al, 2013). This situation could be avoided by assessing strategic spatial planning and a strong commitment between the major stakeholders, namely, the government, as a city designer and planner, private sector, and into Sustainable Urban Development Policy society, allowing them to contribute during the planning process (Albrechts, 2004;Martinez & Fernanda, 2015).…”

Did the Introduction of Carbon Tax in Australia Affect Housing Affordability?

“…Movements in house prices can affect households' spending through a direct wealth effect and collateral effect [23], as well as impact on the profitability of residential construction [24]. The increase of house prices encourages household consumption that contributes to economic growth [25,26]. On the other hand, rapid increases in house prices are associated with the overheating investment [27] and driven an unsustainable expansion in demand.…”

“…On the other hand, rapid increases in house prices are associated with the overheating investment [27] and driven an unsustainable expansion in demand. In addition, households may reduce consumption to meet their increased mortgage payments which will hold back the economic development [20,26]. Housing affordability issues may create social problems such as disparities in wealth [20] and impact on the regional demographic structure [26].…”

“…In addition, households may reduce consumption to meet their increased mortgage payments which will hold back the economic development [20,26]. Housing affordability issues may create social problems such as disparities in wealth [20] and impact on the regional demographic structure [26].…”