SpringerLink
Log in

The Impact of Population Aging on Housing Demand in China Based on System Dynamics

  • Published:
Journal of Systems Science and Complexity Aims and scope Submit manuscript

Abstract

In recent years, the proportion of China’s elderly population is gradually increasing, and the real estate market is changing dramatically. Consequently the impact of population aging on housing demand has become increasingly prominent. On the theoretical basis of the relationship between population aging, family structure and housing demand, this paper firstly constructs a system dynamics model of the impact of population aging and family structure on housing demand in China. Then, the model is simulated, and several scenarios of population, family structure, and real estate policies are set up. The main conclusions of this paper are as follows: China’s population will rise at first and then decrease, reaching a peak of 1.401 billion by 2023. As the proportion of elderly population increases, the degree of population aging is becoming increasingly serious. The size of the family will gradually shrink to 2.39 people per household in 2050. The housing demand will increase first and then decrease. Through the results of scenario simulation, this paper puts forward the following suggestion to effectively balance the housing demand in China: Completely relaxing family planning policies, imposing a real estate tax, canceling the pre-sale policy, and raising the loan rate.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price includes VAT (Germany)

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  1. Zou J, Yu S H, and Wang D B, Regional differences of demographic trends and house price: Empirical study based on panel cointegration model, Journal of Financial Research, 2015, 11: 64–79 (in Chinese).

    Google Scholar 

  2. Zhu L L, Li X T, and Dong J C, Research on the impact of population aging on housing demand, Journal of Systems Science and Mathematical Sciences, 2016, 36(1): 61–74 (in Chinese).

    MathSciNet  Google Scholar 

  3. Chan S and Ellen I G, Housing for an aging population, Housing Policy Debate, 2016, 27(2): 1–26.

    Google Scholar 

  4. Choi C and Jung H, Does an economically active population matter in housing prices?, Applied Economics Letters, 2017, 24(15): 1–4.

    Article  Google Scholar 

  5. Chen Y, Gibb K, Leishman C, et al., The impact of population ageing on house prices: A micro-simulation approach, Scottish Journal of Political Economy, 2012, 59(5): 523–542.

    Article  Google Scholar 

  6. Li M, Shen K, and Qiu J, Population aging and housing consumption: A nonlinear relationship in China, China & World Economy, 2013, 21(5): 60–77.

    Article  Google Scholar 

  7. Levin E, Montagnoli A, and Wright R E, Demographic change and the housing market: Evidence from a comparison of Scotland and England, Urban Studies, 2009, 46(1): 27–43.

    Article  Google Scholar 

  8. Malmberg B, Fertility cycles, age structure and housing demand, Scottish Journal of Political Economy, 2012, 59(5): 467–482.

    Article  Google Scholar 

  9. Takts E, Population aging and house prices, Journal of Housing Economics, 2012, 21(2): 131–141.

    Article  Google Scholar 

  10. Mizuta T, Shimizu C, and Uesugi I, How inheritance affects the real estate market in a population aging economy: Evidence from transaction and registry data, HIT-REFINED Working Paper Series, 2016, 1–32.

  11. Mehrotra S N and Carter D R, Determinants of growth in multiunit housing demand since the great recession: An age-period-cohort analysis, Urban Studies Research, 2017, 2017(3): 1–10.

    Article  Google Scholar 

  12. Cocco J F, Portfolio choice in the presence of housing, The Review of Financial Studies, 2004, 18(2): 535–567.

    Article  Google Scholar 

  13. Ermisch J, The demand for housing in Britain and population aging: Microeconometric evidence, Economica, 1996, 63: 383–404.

    Article  Google Scholar 

  14. Green R and Hendershott P H, Age, housing demand, and real house prices, Regional Science & Urban Economics, 1996, 26(5): 465–480.

    Article  Google Scholar 

  15. Myers D and Ryu S, Population aging baby boomers and the generational housing bubble: Foresight and mitigation of an epic transition, Journal of the American Planning Association, 2008, 74(1): 17–33.

    Article  Google Scholar 

  16. Lee J H and Lim J, Demographic changes and housing demands by scenarios with ASFRs, International Journal of Housing Markets & Analysis, 2013, 6(3): 317–340.

    Article  Google Scholar 

  17. Chen G J, Li W, and Zhou J, Research on the relationship between population structure and house price-based on over lap** generation models and analysis of provincial panels in China, Economist, 2013, (10): 40–47 (in Chinese).

  18. Engelhardt G V and Poterba J M, House prices and demographic change: Canadian evidence, Regional Science & Urban Economics, 1991, 21(91): 539–546.

    Article  Google Scholar 

  19. Siegel J J, The Future for Investors: Why the Tried and the True Triumphs over the Bold and the New, Random House LLC, 2005.

  20. Mankiw N G and Weil D N, The baby boom, the baby bust, and the housing market, Regional Science and Urban Economics, 1989, 19(2): 235–258.

    Article  Google Scholar 

  21. Ohtake F and Shintani M, The effect of demographics on the Japanese housing market, Regional Science & Urban Economics, 1996, 26(2): 189–201.

    Article  Google Scholar 

  22. Lindh T and Malmberg B, Demography and housing demand-what can we learn from residential construction data?, Journal of Population Economics, 2008, 21(3): 521–539.

    Article  Google Scholar 

  23. Dong J, Dai W, Liu Y, et al., Forecasting Chinese stock market prices using Baidu search index with a learning-based data collection method, International Journal of Information Technology & Decision Making, 2019, 18(5): 1605–1629.

    Article  Google Scholar 

  24. He Z, Dong J, and Yu L, An agent-based model for investigating the impact of distorted supply-demand information on China’s resale housing market, Journal of Computational Science, 2018, 25: 1–15.

    Article  Google Scholar 

  25. Landry A, La révolution démographique: Études et essais sur les problèmes de la population, Ined, 1934.

  26. Thompson W S, Population, American Journal of Sociology, 1929, 34(6): 959–975.

    Article  Google Scholar 

  27. Liu C J and Zheng L Y, Demographic transition in modernization process: A micro-scale view, South China Population, 2002, (4): 1–7 (in Chinese).

  28. Modigliani F, The life cycle hypothesis of saving, the demand for wealth and the supply of capital, Social Research, 1996, 160–217.

  29. Duvall E M, Family development’s first forty years, Family Relations, 1988, 37(2): 127–134.

    Article  Google Scholar 

  30. Murphy P E and Staples W A, A modernized family life cycle, Journal of Consumer Research, 1979, 6(1): 12–22.

    Article  Google Scholar 

  31. Forrester J W, Urban Dynamics, MIT Press, Massachusetts, Cambridge, 1969.

    Google Scholar 

  32. Shen Q, Chen Q, Tang B S, et al., A system dynamics model for the sustainable land use planning and development, Habitat International, 2009, 33(1): 1–25.

    Article  Google Scholar 

  33. Duggan J, An introduction to system dynamics, System Dynamics Modeling with R, Springer International Publishing, West Berlin and Heidelberg, Germany, 2016.

    Chapter  Google Scholar 

  34. Kunc M, Mortenson M J, and Vidgen R, A computational literature review of the field of system dynamics from 1974 to 2017, Journal of Simulation, 2018, 12(2): 115–127.

    Article  Google Scholar 

  35. Kwoun M J, Lee S H, Kim J H, et al., Dynamic cycles of unsold new housing stocks, investment in housing, and housing supply-demand, Mathematical and Computer Modelling, 2013, 57(9–10): 2094–2105.

    Article  Google Scholar 

  36. Zhang X, Geltner D, and de Neufville R, System dynamics modeling of Chinese urban housing markets for pedagogical and policy analysis purposes, The Journal of Real Estate Finance and Economics, 2018, 57(3): 476–501.

    Article  Google Scholar 

  37. Song J, Yu J Y, and Li G Y, Forecast in the population development process, Science China, 1980, (9): 102–114 (in Chinese).

  38. Zeng Y, Li W, and Liang Z W, The current situation, regional differences and changing trends of Chinese family structure, Chinese Journal of Population Science, 1992, (2): 1–12 (in Chinese).

  39. Yi D, Deng X, Fan G Z, et al., House price and co-residence with older parents: Evidence from China, The Journal of Real Estate Finance and Economics, 2018, 57: 502–533.

    Article  Google Scholar 

  40. Wang W, Saving and growth effects of the one-child policy: Theory and China’s empirical study, Economic Research Journal, 2010, 45(10): 63–77 (in Chinese).

    Google Scholar 

  41. Zhu L H and Zhao Z Y, The current saving effect of population aging in China and its impact in the future: Based on the empirical facts in Japan, Northwest Population, 2013, 34(1): 21–25 (in Chinese).

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. School of Economics and Management, Bei**g Information Science & Technology University, Bei**g, 100192, China

    **ndi Mou

  2. School of Economics and Management, University of Chinese Academy of Sciences, Bei**g, 100190, China

    **uting Li & Jichang Dong

Authors
  1. **ndi Mou
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. **uting Li
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Jichang Dong
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to **uting Li.

Additional information

This research was supported by the National Natural Science Foundation of China under Grant Nos. 71403260, 71573244, 71532013 and 71850014, the University Research Foundation of Bei**g Information Science & Technology University under Grant No. 2035004.

This paper was recommended for publication by Editor ZHANG **nyu.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Mou, X., Li, X. & Dong, J. The Impact of Population Aging on Housing Demand in China Based on System Dynamics. J Syst Sci Complex 34, 351–380 (2021). https://doi.org/10.1007/s11424-020-9114-z

Download citation

  • Received:

  • Revised:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11424-020-9114-z

Keywords

Search

Navigation