Commercial property markets and property cycles in Chinese cities

Abstract

This paper uses interview data to explore and examines property markets in three Chinese cities with the focus placed on the emergence of the commercial property markets and the government-market interplay, noting the market formation process and cycles that are ‘unexpected’ in a transitional economy. The research identified varying opinions and perceptions among key stake-holders about cycles in China’s emerging commercial property markets. Interviews in the three cities suggested a spectrum of factors that may substantially affect the stability of China’s office markets. A cross-sectional comparison of the three cities has revealed a similar pattern of cyclical behaviour highlighting structural change and state intervention with leads-and-lags, in spite of the dispersion in geography, culture and market maturity. The various views offered about market mechanism and cyclical behaviour represent varying levels of market maturity. These brief insights offer an opportunity to develop an alternative approach to measure property market conditions in emerging or immature markets such as China.