Housing intermediary services in China: The rise and fall of 'Fang Wu Yin Hang'

Abstract

Housing reforms in China are often conceived to have engendered a gradual shift towards a market system. New institutions have been introduced to enable decentralized, monetarized and privatized allocation of housing units. This study explores the emergence, growth and downfall of an intermediary service (known as 'fang wu yin hang') created spontaneously by real estate agents to facilitate housing transactions in the Chinese cities. Although this new institution looked capable of strengthening the rationality, efficiency, transparency and impersonality of China's housing market, it was abandoned soon after its inception. The failure of this transient service suggests the presence of some social institutions, which could have blocked China's progress towards a full-fledged market system in the housing sector. © Springer Science+Business Media B.V. 2006.