Preferential size of housing in Beijing

As the result of rapid and incomplete transition from a planned economy to a market one, urban housing market has been seriously distorted in China. In order to ensure the appropriate supply of housing, housing size regulations have to be established, which necessitates good knowledge on the preferential size of housing. This paper proposed an empirical framework to identify the preferential size of housing perceived by people. A hedonic approach was adopted to analyze the willingness of urban households to pay for the size of their accommodations. With the transaction price data of second-hand apartments in Beijing, the marginal benefits of urban households in relation to housing size were investigated, which revealed that 50–60 m2 and 80–190 m2 (including shared public space) were more highly valued than other sizes of apartment housing in Beijing. Further examinations of the market balance of supply and demand as well as the impact of bubble effect on market conditions demonstrated that the results were reliable. Based on the implications of the results, suggestions were made for the implementation of housing size regulation and relevant policies.

Research highlights► The urban housing market in China is seriously distorted, particularly in terms of size of housing unit. ► This research attempts to determine the residents’ preferred size of housing unit. ► A hedonic methodology is employed. ► The preferred housing unit size seems to be 50–60 m2 and 80–190 m2 (including shared public space).