Distribution dynamics of China's regional housing price disparity

Based on the methods of distribution dynamics analysis, this study estimates the regional housing price disparity across China's eastern, central and western regions. Analysis from decomposition of housing price growth rate by subgroup indicates that the disparity is largely due to intra-regional rather than inter-regional differences. Eastern region contributes the most to the disparity of housing prices, followed by the Central region and the Western region. Ergodic distributions reveal that Eastern region with housing price growth rates from 4% to 7% tend to move upwards in the coming period, while in the Central and Western regions housing prices tend to converge to no change of housing prices. Mobility probability plot result further suggests that medium sized housing may have higher probability for price growth. The findings help better understand the regional disparity of housing price in China, an issue that has largely been neglected. Long-standing inequality across regions can exert adverse impact on poverty reduction, economic development, and even social stability. The research implications will enable scholars and policymakers to rethink the impact of homeownership financialization when discussing and designing housing policies.