The High House Prices in China:An Analysis Based on the Principle of Supply-demand Equilibrium

This article uses the principle of supply-demand equilibrium—the most basic tool in economics to analyze the causes of the high house prices in China It shows that the high house prices in China is simply the reflection of the law of price in a market characterized by some rigid institutional structure;when the increase of demand cannot correspondingly induce the increase of supply,the price becomes the only channel that could get such pressure released.Just as a planned economy is doomed to be a shortage-pervasive economy and to point a finger at some agents in such an economy for the pervasive shortage is unreasonable,in facing high house prices,similar criticism is also untenable,and moreover,such doing can only shift the focus of our attention to the wrong direction.