Housing wealth accumulation as a driver of inequality: Uncovering housing appreciation dynamics across urban China

Urban households in China have accumulated substantial housing wealth over recent decades, driven by rapid growth in homeownership rates and housing values. However, the ways in which housing wealth has evolved under changing market conditions remain insufficiently understood. There is also limited research on how housing price appreciation is distributed across households and how it contributes to disparities in wealth accumulation. This study addresses this gap using data from the China Household Finance Survey. Employing a GSEM, we examine households with varied socioeconomic characteristics – including hukou status, education, occupation and income – entering the housing market at different times and via divergent channels, to identify the factors influencing housing appreciation rates. The findings reveal considerable variation among social groups and across city tiers, highlighting the significance of timing and geographical disparities. The results suggest that the dynamics of housing as an investment asset are reinforcing existing inequalities, underscoring the need for policies that promote access while addressing wealth inequality and market distortions.