The Determinants of Homeownership Affordability among the ‘Sandwich Class’: Empirical Findings from Guangzhou, China

Abstract

The ‘sandwich class’ is an East Asian term referring to the lower middle class. Using a large and unique micro dataset collected in Guangzhou, this paper examines empirically the potential determinants of housing affordability of the ‘sandwich class’. It is found that an individual’s self-perceived range of housing options is dependent not only on his/her current and predictable economic and financial resources, but also on his/her occupation and socio-demographic characteristics. The empirical findings are found to be robust against potential endogeneity problems and not sensitive to the regression specifications used. The empirical findings reported here help to deepen our understanding of the homeownership affordability determinants of the lower middle class in emerging economies characterised by an underdeveloped housing system.