The price of a good determine the quantity demanded. The term demand means the amount of people that are willing and able to buy the good. There is a negative correlation between price and quantity demanded, but a positive correlation between price of good and quantity demanded for the substitute good. In this situation, second-hand houses was the substitute good for new houses.
In 2015, the housing rise in Beijing experienced a huge increase, the average growth of housing price was 15 percent, some districts’ housing price growth even reached 29.2%.
The average transaction price in 2015 was 29457 RMB per square meter, it had a growth of 9.7% compare to 2014.
The total revenue of real estate was nearly 193 Billion RMB, its an significant increase compare to 154 billion RMB in 2014
The second-hand housing volume also increased while the housing price increased.
Until the data was collected, second-hand housing volume in Beijing was already 183741, which increase more than 80% compare to the previous year.
However, in contrast of the great increase in housing price, and the second-hand housing volume, the amount of new houses sold decreases.
There is an great decrease in the total house sold compare to 2010, the amount of house sold decreased from 82349 to 51424