Analysis Of The Efficiency Of Chinese Housing Finance

While the industry of real estate evolved and developed along with the thorough reform in the housing and finance system, the housing finance in china is making rapid progress. However, once we take all-sided and impersonal view over the housing finance, we will definitely realize the conflict between the high speed and the low efficiency of it. In this paper, it's analyzed that there're five factors affecting the efficiency of housing finance, based on the basic situation of china as a developing country and according to some related theories of the western economics. The first one is the dual-track interest rate which presumes that price of housing credit financing is under the control of government to a certain extent, and the rest is open. The second is the vagueness of property right in the institution of housing finance. Particularly, the problem in the policy institution causes the lack the motivity for finance creativity, the simplism of financial vehicles which can not satisfy great variety of needs of residents. Next is the increase of consumption and reduction of efficiency as a result of high price for trade in the housing credit. The fourth factor is the lack of real housing finance institution and related guarantor institution, which make the housing finance imperfect. Furthermore, financing mechanism in the housing finance has not come to maturity, the source of long-term credit financing and the term configurations of capital indebtedness are not corresponsive. They are also the important factor which affects the efficiency of housing finance. As what has been said, the paper puts forward five plans to improve the efficiency of the housing finance. First is the marketization of the interest rate. The government must solve the problem of housing of low-income people with allowance through other commercial ways. Second is the improvement of the housing finance system and the definition of property right of the housing finance institution. The professional housing finance institution and relatedguarantor institution must be constituted and improved. Meanwhile, proprietorship, management and superintendence of housing finance institution must be clarified by the establishment of perfect system of management and superintendence. The third is to establish integrative systems for systemic evaluation and information disclosure to reduce the trade cost because of the asymmetry of information. Fourth, the needs of consumers have to be satisfied by creating other financial vehicles. The last one is to increase the security and liquidity of housing financing, and to reduce the risk and improve the efficiency. The secondary mortgage market must be established.