Demographics and housing demand: Evidence from China

Demographic structure is considered to be an important factor affecting housing demand, but there is still a lack of consistent conclusions on how population ageing affects housing demand. This paper examines how the housing demand is affected by age and other demographic factors. Using the household-level data from China’s Urban Household Survey, we find that the housing demand is negatively affected by population ageing, while positively impacted by education, providing clear evidence of an offsetting effect between age and education. Further analysis shows that rapid population ageing in China should not be expected to result in a decrease in housing demand because the current middle-aged generation has much higher educational attainment than the current older generation.