Asia | China | Emerging Markets | Monetary Policy & Inflation
Will China’s Real Estate Market Crash?
- By Sam van de Schootbrugge
- 7 min read
Summary
- A new NBER working paper, co-authored by prominent economist Ken Rogoff, highlights long-term imbalances in China’s real estate market.
- These problems are most pervasive in small- to medium-sized cities, where most of China’s economic activity occurs.
- The paper estimates a 30% reduction in real estate construction by 2035 and, as a result, a 5pp drop in the sector’s overall share of China’s GDP.
Introduction
By international standards, China’s real estate sector is exceptionally large. It accounts for over a quarter of GDP (Chart 1) – almost double that of the US (14%). The result of a multi-decade construction boom, China now has square meters per capita of housing comparable to many wealthy advanced economies.
This article is only available to Macro Hive subscribers. Sign-up to receive world-class macro analysis with a daily curated newsletter, podcast, original content from award-winning researchers, cross market strategy, equity insights, trade ideas, crypto flow frameworks, academic paper summaries, explanation and analysis of market-moving events, community investor chat room, and more.