Peak China Housing

45 Pages Posted: 17 Aug 2020 Last revised: 5 Sep 2022

See all articles by Kenneth Rogoff

Kenneth Rogoff

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Yuanchen Yang

International Monetary Fund

Date Written: August 2020


China’s real estate has been a key engine of its sustained economic expansion. This paper argues, however, that even before the Covid-19 shock, a decades-long housing boom had given rise to severe price misalignments and regional supply-demand mismatches, making an adjustment both necessary and inevitable. We make use of newly available and updated data sources to analyze supply-demand conditions in the fast-moving Chinese economy. The imbalances are then compared to benchmarks from other economies. We conclude that the sector is quite vulnerable to a sustained aggregate growth shock, such as Covid-19 might pose. In our baseline calibration, using input-output tables and taking account of the very large footprint of housing construction and real-estate related sectors, the adjustment to a decline in housing activity can easily trim a cumulative 5-10 percent from the level of output (over a period of years).

Suggested Citation

Rogoff, Kenneth S. and Yang, Yuanchen, Peak China Housing (August 2020). NBER Working Paper No. w27697, Available at SSRN:

Kenneth S. Rogoff (Contact Author)

Harvard University - Department of Economics ( email )

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Yuanchen Yang

International Monetary Fund ( email )

United States

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