Equilibrium-Oriented Housing Supply: A Case Study of Chengdu City, China

Abstract

There is a growing concern regarding housing supply management because of soaring housing prices consequent to recent market failure in China. This study is aimed at presenting an equilibrium-oriented housing supply management model that integrates housing supply and demand with time lag and reasonable vacancy area. For validity test of the model, Chengdu City was selected as a sample. The study establishes the feasibility of this model by demonstrating that optimized housing supply can narrow the gap between housing supply and demand. The implication of this finding is that planning of housing supply is an important management tool and that in applying this tool, local government should intervene in housing market to ensure scientific consideration of city's development position, economic growth and housing demand.

Key words: Housing supply management, Housing market, Housing price, Dynamic economics model, China.
JEL: R31, D04.