A Study of Housing Price Drivers in China's New First-Tier Cities

Abstract

Over the past two decades, urban housing prices in China have surged dramatically, prompting extensive research into the underlying causes. Despite scholarly efforts, a comprehensive analysis of the factors influencing housing prices in newly-designated first-tier cities remains elusive. This study aims to bridge this gap by examining a range of determinants impacting housing prices within these rapidly growing urban areas.Utilizing a detailed conceptual framework, the research identifies key influences such as financial expectations, market demand, and the availability of public services. The findings suggest that these factors play a substantial role in driving housing prices upwards, reflecting the rising purchasing power and urbanization trends in these cities. Interestingly, the study also highlights that limited land supply—often considered a primary driver of housing costs—does not significantly impact pricing in the context of new first-tier regions.This analysis underscores the complexity of the housing market dynamics in China, suggesting that policymakers should consider a broader range of influencing factors when addressing housing affordability and stability in these burgeoning urban centers. As a result, the study contributes valuable insights for stakeholders aiming to better understand and navigate the challenges of housing prices in China's evolving urban landscape.