Analysis And Precaution On Real Estate Financial Risks Of China

According to the summery of the global financial crisis or the economic crisis, all of their reasons are the property speculation, or relating to it. The development of Real estate plays a crucial role on a country's overall economic health situation. In the past dozen years, China's economic growth was contributed to the Real estate. Consumption, investment and export trade are the three major the dynamo for economic growth, among the three, investment and exports are the core of China's economic growth, Real estate is an important force of the investment. The average profit of Real estate is higher than regular industry, so it has attracted a lot of institutional investors and retail investors'funds to the Real estate. In our Real estate market, the investors who have genuine housing needs is only a small part, most of them are driven by the benefits of the Real estate speculation. Because of our single real estate financing channels, and commercial banks are the main providers of funding, the real estate financial risks concentrated to the financial system. Once the financial risk exposed in our banking system there will be a huge impact on the whole economy. Therefore, we must never ignore the serious harm of the real estate financial risk; make prevention and solution as soon as possible to maintenance the stability and security of the national economy and the entire financial system.In this paper, Chinese's real estate status and problems is given first; then analysis influencing factors and forming mechanism of our real estate, analysis the relation between economic cycles and real estate by VaR model and variable arguments model; third, study the experience of the united states, Japan and Singapore in financial risk prevention; with the combination of realities in china, give the proposal of our real estate and financial risk prevention, mainly including three aspects:the establishment of a macro monitoring indicators, establishment of a perfect letter of credit system and establish a diverse channels an so on.