A Tale of Tier 3 Cities
IMF Working Papers, September 30, 2022
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- A Tale of Tier 3 Cities
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Bibliographic details
- Authors: Kenneth Rogoff, Yuanchen Yang
- Published: September 30, 2022
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400222320.001
Summary and main findings
- Provides new estimates of the housing stock, construction rates and price developments by city tier in China to understand where imbalances might be concentrated, and the implications of any significant contraction.
- Updates estimates of the size of China’s real estate sector through 2021, allowing examination of the initial impact of COVID-19.
- Extends analysis to incorporate urban-expansion related infrastructure construction.
- Core conclusion: China overall faces imbalances between supply and demand for housing stock, but the problem is significantly deeper outside tier 1 cities.
Data, scope, and analytical focus
- Geographic focus: China, analyzed by city tier (including tier 1 and tier 3 cities).
- Time coverage: through 2021 (explicitly used to assess initial impact of COVID-19).
- Sectoral coverage: housing stock, construction rates, housing price developments, and urban-expansion related infrastructure construction.
- Analytical objectives:
- Estimate housing stock by city tier.
- Estimate construction rates by city tier.
- Track price developments by city tier.
- Assess where imbalances between housing supply and demand are concentrated.
- Evaluate implications of a significant contraction in the real estate sector.
Implications and policy-relevant points
- Imbalances in housing supply versus demand are a nationwide issue in China, with more acute problems outside tier 1 cities.
- The paper’s extension to include infrastructure construction related to urban expansion highlights the broader scale of real-estate–linked activity beyond pure housing construction.
- Updating estimates through 2021 provides a baseline for understanding the initial economic shocks from COVID-19 on China’s rapidly evolving real estate sector.
Keywords and subjects (as provided)
- Subjects: Depreciation, Financial institutions, Housing, Housing prices, Infrastructure, National accounts, Prices, Stocks
- Keywords: China, construction rate, Depreciation, Housing, Housing prices, housing stock estimation, Infrastructure, infrastructure construction, infrastructure investment, Macro Economy, Real Estate, sector vulnerability, Stocks
A Tale of Tier 3 Cities — Kenneth Rogoff, Yuanchen Yang; IMF Working Paper No. 2022/196.
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- Working Paper