The social welfare housing project and its effects in China

It was planned to build 36 million units of social welfare housing during the twelve-five 2011-2015 in China. This paper introduces the estimation of owner occupied dwelling sector and develops a dynamic computable general equilibrium model for China's real estate and macro-economy, to simulate the policy effects. The simulation results show that this policy can meet the increased requirements of housing demand due to fast urbanization and improvement of living conditions, therefore it will effectively cool down the price boom of housing market. Meanwhile, although the investment on social welfare housing will reduce the investment on other sectors, it will still stimulate GDP growth.