Housing prices and consumption

Unlike developed countries, the fall in housing prices in China will stimulate rather than reduce consumption, says an article in Oriental Morning Post. The following is an excerpt.

Following the fall of house prices in the United States, China's housing prices have also become sluggish. People are wondering whether this would affect domestic consumption and economic growth.

We believe that the fall in our housing prices is different from that of the US. In the US an individual owns his or her land, and gains from the appreciation of the land also belongs to the individual. In China, land is owned by the State or a collective group and the major beneficiaries of land appreciation are the government and State-owned enterprises.