The Future Evolution of Housing Price-to-Income Ratio in 171 Chinese Cities

This paper examines the future dynamics of the relative housing price-to-income ratio (RHPIR) in China. We find that the convergence in RHPIR will be more congregated in the non-center cities of city clusters, the cities from the eastern region, with a net outflow of population, and low economic policy uncertainty (EPU). The convergence clubs will emerge in the cities with a net outflow of population and from the central and northeastern regions. The center and the non-center cities of city clusters will converge to parallel affordability paths. We pinpoint the cities with precise ranges of RHPIR that require special attention from the policymakers aiming at convergence in housing affordability