The Residential Housing Market System Model And House Price Risk Management

Financial crisis happened more frequently with the globalization of economy, the macro economy stability is not only important for the domain development but also for any economy in the worldwide. Credit market plays an important role in real estate market. The asset-price volatility to be of concern to policy-makers is that booms and busts in asset markets have important effects on the real economy. Considering about all these, we do some research on the real estate market under the baseline: the risks forming- the risks measurement- the risks management, after overview the main research the main work is carrying out the research on residential housing markets system model, residential housing market complex networks model, house price risk valuation method and house price risk management:(1) In a bank-dominated country, the residential housing market system abstractly includes banks, house producers, and house buyers; each interacts with the others through transactions. Through credit arrangements, banks affect both the supply and demand sides of the residential housing market. In addition, select the main 5 variables to make cointegration test and Granger causality tests, we build up the long term equilibrium function and the short term dynamic adjustment function and uncover the laws of the housing market in China.(2) Extend "Financial Accelerator" model to residential housing market sector. Considering the credit support for both supply and demand sides and its amplificatory effect on the market activities, a theoretical model contain house buyers, house producers and banks is built up. The critical expected return for investment is 2.82% according to the empirical analysis in China, if the expect return is larger than it, they can invest; the three factors affect the investment decision are: the interest rate of loans, external finance rate and mortgage rate. Policy makers can adjust these factors to control the impulse of investment. The "financial accelerator" based housing real estate market system model change the status quo of the lack of quantitatively analysis on housing markets system due to the limited data in China.(3) Build up a theoretical complex networks model contain a topology of banks, house producers, house buyers and their interactions and a dynamics that house buyers select house producers according to a preferential rule, uncover the laws of housing real estate markets instruction and dynamics. An evolving network in the Shanghai residential market is also simulated. It brings a new method to analyze the housing markets to meet the challenges of the complexity of residential real estate markets and a dearth of large databases, and it is very instructive to carry out related research on empirical analysis.(4) The asset price fluctuation relative to the GDP gap and CPI volatility indicates the house price risk, describe the parts beyond the economy could bolster and the imbalance extent of the resource allocation. Uncover the laws that the real estate markets must be consisted with the real economy, and the bubbles will shrink at last. After quantitative assessment in US, UK, Hong Kong and Japan, the historic bubbles are tested and the framework is proved to be effective. It provides a new method and instrument for risk managers, regulators and monetary policy makers. At last, a further empirical analysis is made in Shanghai real estate markets. The results indicate that bubbles in 2005 caused by imbalance extent of the resource allocation, and should be comforted by increasing fmancing channels. The research put forward a method to assess house price risk, give some advices to policy makers and give some new clues for business cycles and equilibrium theory.(5) How to process the risks include to assimilate, release, absorb, disperse, transfer, hedge, control, and restrain risks. The monetary policy responds to house price fluctuation is to control and restrain risks to macro economy and financial system; real estate finance products is to hedge and transfer the risks. So the Taylor model is improved and a muti-goal monetary policy respond model is brought out. It provides a summary on real estate finance at last.